Deputy Chief Economist

Sharmila Whelan

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Macroeconomics

<p><strong>We expect India to cut policy rates further in 2018 and for the Philippines, Korea and possibly Malaysia to raise. Elsewhere we expect no change to current monetary policy stances. </strong><strong>Real lending rates are too high in India, Indonesia and Thailand, and too low in the Philippines. In Indonesia and Thailand though the onus has shifted from monetary policy to fiscal policy. For the rest of Asia, real lending rates are at appropriate levels. Bar Indonesia, the Philippines and Japan, everywhere else M2 growth is either decelerating or flat implying that underlying price pressures are weak. A comparison of growth in M2 and nominal GDP further confirms Asia does not have an excess liquidity problem.  Asian credit cycles also remain in good shape and in most countries in early stages of recovery. India, where the credit cycle is in downturn, is the exception.</strong></p><table class="table table-striped"><tbody><tr><td></td></tr></tbody></table>

We expect India to cut policy rates further in 2018 and for the Philippines, Korea and possibly Malaysia to raise. Elsewhere we expect no change to current monetary policy stances. Real lending rates are too high in India, Indonesia and Thailand, and too low in the Philippines. In Indonesia and Thailand though the onus has shifted from monetary policy to fiscal policy. For the rest of Asia, real lending rates are at appropriate levels. Bar Indonesia, the Philippines and Japan, everywhere else M2 growth is either decelerating or flat implying that underlying price pressures are weak. A comparison of growth in M2 and nominal GDP further confirms Asia does not have an excess liquidity problem.  Asian credit cycles also remain in good shape and in most countries in early stages of recovery. India, where the credit cycle is in downturn, is the exception.

Asia 2018 Policy Rate Outlook - Bumps & Boosts