Emerging Markets: What Has Changed

(from Dr. Win Thin and Ilan Solot) 1) The central bank of Indonesia surprised markets again 2) Data in Brazil are improving 3) Chinese lending data suggest signs of greater activity in the shadow banking sector 4) The Russian opposition party fared very well in the Moscow election 1) The central bank of Indonesia surprised […]

Emerging Markets: What has Changed

This is what has changed in the EM space, in our view: 1) Thailand:  Officials are stepping up action and rhetoric against THB appreciation 2) India: We are becoming more optimistic that the INR will finally start to recover 3) Mexico: Banxico is sounding dovish again, but caution is needed in interpreting comments 4) Indonesia: […]

The East Grows Only Because the West Consumes…It’s a Hypothesis

An abiding belief held by many about the global economy is that the East is one gigantic Foxconn-shaped, steroid-boosted manufacturing facility, pumping out iPhones, shoes, clothing, refrigerators, air-conditioners, and defective toys that its own people could never afford. In this narrative, the only reason that measured Eastern GDP shows any kind of life is because […]

Nouriel: Indonesia Still a Compelling EM Story

In Indonesia to speak at the NYSE, Nouriel noted Indonesia’s continuing strong performance among emerging markets. In the two years since Nouriel loudly advocated Indonesia’s status as a major EM, Russia has indeed suffered numerous macro and political setbacks, while Indonesia has continued a process of solid fiscal and macro policy, for laudable growth. The […]

Central Banks: Contrasts in Asia-Pacific

Reserve Bank of Australia: surprise inaction Last week, the Reserve Bank of Australia surprised us by leaving the overnight cash rate (the official cash rate) unchanged at 4.25%. Most of us had anticipated a rate cut and, in fact, thought it was a shoo-in, given weak trends in retail sales, building approvals and employment. In […]

The Korean Shocker

This blog post should have been made on Monday morning. Since then, Indonesia released its 2011 and 4Q2011 GDP growth figures. In an eerie similarity to Chinese data and analysts’ ability to get the numbers down to the second decimal place, Indonesian GDP growth figures matched analysts’ expectations with a remarkable degree of precision.  Other […]

Investing in a Rebalancing of Growth in Asia

Continuing my travels through Asia for the launch of our October 2010 Regional Economic Outlook: Asia and Pacific, I am writing to you today from Singapore. In my last post, I focused on the near-term outlook and challenges for Asia. Today, I turn to the key medium-term challenge—the need to rebalance economies in the region away from heavy reliance on exports by strengthening domestic sources of growth. This is against a backdrop of the need to rebalance global growth that was emphasized over the weekend by the ministers of the Group of Twenty industrialized and emerging market countries.

Capital Controls Gain Credence

Capital controls are back in fashion. In June 2010, South Korea and Indonesia announced several policy measures to regulate potentially destabilising capital flows, which could pose a threat to their economies and financial systems.

Window of Opportunity for South Asia

The 10th National People’s Congress and the Chinese People’s Political Consultative Conference held in March this year have been an excellent platform to understand which way China is heading as far as its economic and political reforms are concerned.

China’s future pattern of economic development received top priority in the assembly. In this connection, one of China’s key strategic imperatives is to shift its economic structure towards high value-added manufacturing and services.

Indonesia Moves to Tame Speculative Capital Flows

Within three days of South Korea imposing currency controls, Indonesia (a member of G-20) unveiled several policy measures to regulate potentially destabilizing capital flows. The policy announcement by Indonesia is the latest initiative by emerging markets to tame speculative money which could pose a threat to their economies and financial systems.