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A Reuters poll of 17 analysts show that 15 are forecasting a rate hike. An easing of import restrictions and the removal of subsidies - both conditions of the bailout - have fueled spikes in energy prices. Although overall inflation fell slightly to 27.4% in August, food inflation remain elevated at 38.5%. Pakistan's central bank said in July that it expects inflation to be on a downward path over the next 12 months. Analysts also noted that rises in cut-off yields in treasury bill auctions - the highest yield at which a bid is accepted - indicate that market participants expect a rate hike.

Persons: Shivaan Tandon, Ariba Shahid, Swati Bhat, Edwina Gibbs Organizations: State Bank of Pakistan, Capital Economics, Thomson Locations: KARACHI, Karachi

Bank Indonesia's logo is seen at its headquarters in Jakarta, Indonesia, January 17, 2019. Bank Indonesia (BI) plans to issue new rupiah-denominated securities, using its holdings of government bonds as the underlying asset, as a new monetary instrument aimed at attracting foreign portfolio capital flows, Governor Perry Warjiyo said. BI kept the benchmark 7-day reverse repurchase rate (IDCBRR=ECI) at 5.75% for its seventh straight monthly policy review, as widely expected by economists surveyed by Reuters. Guarding the rupiah "is our way to protect the domestic economy, inflation and growth from global spillovers," Warjiyo told reporters. Inflation slowed in July to 3.08%, roughly the midpoint of the central bank's 2% to 4% target range.

Persons: Willy Kurniawan, Perry Warjiyo, Warjiyo, Radhika Rao, Shivaan Tandon, Bank Danamon, Fransiska Nangoy, Bernadette Christina Munthe, Stefanno Sulaiman, Ananda Teresia, Gayatri Suroyo, Martin Petty, Kim Coghill, Kirsten Donovan Organizations: REUTERS, Bank Indonesia, BI, Reuters, Securities, U.S, Treasury, DBS Bank, Capital Economics, Bank, Thomson Locations: Jakarta, Indonesia, JAKARTA, Asia's, China

☆ Asia's factories face weak demand, signaling growth challenges ahead
▼ + stars: | 2023-08-01 | by ( Clement Tan | ) www.cnbc.com time to read: +2 min

Six out of the nine private surveys released Tuesday showed that manufacturing activity in Asia's major producers again contracted in July. In addition to China, readings for Japan, South Korea, Malaysia, Taiwan, Vietnam also signaled contraction in manufacturing activity. "The data reaffirm our view that external demand will constitute a headwind to growth in the second half of 2023." PMI manufacturing surveys are leading indicators of economic activity. A reading above 50 points to an expansion in activity, while a reading below that level suggests a contraction.

Persons: PMIs, Shivaan Tandon Organizations: Factories, Emerging, Capital Economics, PMI Locations: East China's Shandong province, Asia, China, Japan, South Korea, Malaysia, Taiwan, Vietnam, India, Indonesia, Philippines, Emerging Asia

☆ Asia's factory activity shrinks as China's slump, global slowdown weigh
▼ + stars: | 2023-08-01 | by ( Leika Kihara | ) www.reuters.com time to read: +2 min

Japan, South Korea, Taiwan and Vietnam saw manufacturing activity contract in July, the surveys showed, highlighting the strain sluggish Chinese demand is inflicting on the region. China's Caixin/S&P Global manufacturing purchasing managers' index (PMI) fell to 49.2 in July from 50.5 in June, missing analysts' forecasts of 50.3 and marking the first decline in activity since April. "Falling new orders, bleak employment prospects and high inventory levels point to subdued factory activity in the coming months." Japan's final au Jibun Bank PMI fell to 49.6 in July, down from 49.8 in June, due to weak domestic and overseas demand. In India, growth in manufacturing activity slowed for a second month, but the pace of expansion remained healthy and beat expectations.

Persons: forestalling, PMIs, Shivaan Tandon, Leika Kihara, Sonali Paul Organizations: PMI, TOKYO, P Global, Emerging, Capital Economics, Jibun, International Monetary Fund, Thomson Locations: Japan, South Korea, Asia, Taiwan, Vietnam, Emerging Asia, India

☆ South Korea's Q2 GDP speeds up but weakness clouds outlook
▼ + stars: | 2023-07-25 | by ( Jihoon Lee | ) www.reuters.com time to read: +2 min

It beat the median 0.5% rise forecast in a Reuters survey of economists and marked the biggest quarterly growth since the second quarter of 2022. "Qualitatively, it is not so positive as the headline figure indicates," said Park Sang-hyun, chief economist at HI Investment Securities. Asia's fourth-largest economy is expected to grow 1.4% in 2023, down from 2.6% in 2022, according to the latest forecasts by the central bank and the government. "The upshot is that the central bank, enabled by falling inflation, is likely to step in to support the economy by loosening monetary policy in the coming months," said Shivaan Tandon, emerging Asia economist at Capital Economics. Reporting by Jihoon Lee; Editing by Ed Davies, Kim Coghill and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

Persons: Asia's, Shivaan Tandon, Jihoon Lee, Ed Davies, Kim Coghill, Sam Holmes Organizations: Gross, Bank of, HI Investment Securities, Capital Economics, Thomson Locations: SEOUL, Bank of Korea, Asia

☆ Asia's factory activity weakens as global demand falters
▼ + stars: | 2023-04-03 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

"With global growth set to remain weak in the coming quarters, we expect manufacturing output in Asia to remain under pressure," said Shivaan Tandon, emerging Asia economist at Capital Economics. South Korea's PMI fell to 47.6 in March from 48.5 in February, contracting at the fastest pace in six months as export orders took a hit from weak global demand. Vietnam and Malaysia saw factory activity shrink in March, while that of the Philippines expanded at a slower pace than in February, surveys showed. While indications are that the U.S. Federal Reserve will pause its tightening cycle soon, the outlook remains clouded by the banking-sector troubles, still-high inflation and slowing global growth. "Given much of the drag from higher interest rates is yet to feed through to advanced economies, we expect global growth and demand for Asia's exports to remain weak in the coming quarters," Capital Economics' Tandon said.

Eighteen out of 20 economists and market watchers surveyed said the central bank would hike rates, with 12 of them predicting a 200 bps increase. Two poll participants saw the benchmark raised by 100 bps, while four forecast a 150 bps hike. Worldwide growth in consumer prices has compounded high inflation in Pakistan caused by a weakening currency, energy tariff increases and elevated food prices due to Ramadan. The latest consumer price-based inflation clocked a 31.5% rise on year in February, the highest in nearly 50 years. The State Bank of Pakistan has raised rates by a total 10.25% since January 2022.

☆ Malaysia surprises by holding rates as economic risks loom
▼ + stars: | 2023-01-19 | by ( A. Ananthalakshmi | ) www.reuters.com time to read: +2 min

Bank Negara Malaysia held the overnight policy rate at 2.75%. "Today's decision allows the monetary policy committee to assess the impact of the cumulative past overnight policy rate (OPR) adjustments, given the lag effects of monetary policy on the economy," Bank Negara Malaysia said in a statement. Future monetary policy moves would depend on both domestic inflation and the growth outlook, it said. The central bank has said growth in 2022 likely surpassed the government's 6.5%-7% forecast, but would drop to 4%-5% this year. Capital Economics said it now expects the Malaysian central bank to hold interest rates unchanged for the rest of the year, and begin cutting in 2024.

☆ Malaysia's economy likely grew 11.7% in Q3, outlook cloudy
▼ + stars: | 2022-11-09 | by ( Anant Chandak | ) www.reuters.com time to read: +2 min

The Nov. 1-8 poll of 22 economists predicted the economy expanded 11.7% in the July-September quarter compared with the same period a year earlier. In the previous quarter, the economic grew 8.9%. Trade and economic activity was also likely to be affected by China's strict COVID-19 containment measures and a slowdown in global growth. A separate Reuters poll showed Malaysia's growth would average 7.2% this year and then fall to 4.2% in 2023. "The currency is likely to remain under downward pressure until U.S. bond yields peak and market participants remain risk averse amid elevated levels of global economic uncertainty," added Tandon.

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