Bangkok--19 Jan--Standard Chartered Bank
By John Calverley
Head of Research, North America
Standard Chartered Bank, Toronto
- The US economy is in a deep recession which will continue in the first half of 2009 but a gradual recovery should start in the second half of the year.
- The US policy response is very strong, with interest rates almost at zero and a large new fiscal stimulus expected from President Obama
- But the underlying problems in the US are severe — particularly dealing with the collapse of the housing bubble and the continuing stress in the financial system
- In many ways the US faces a similar crisis to Thailand in 1997-8. The big difference is that the US does not have a currency crisis.
- The US recession has spread to Europe and Japan, and many emerging countries have slowed sharply too. This makes it the most serious synchronized world recession since the early 1980s.
- But once the US levels off and starts to recover, Asia should be able to pick up again.
- Asia in general has less of a structural problem than the US and so could rebound strongly going into 2010
2009 FX outlook
By Mr. Callum Henderson
Director and Head of FX Strategy of Global Research
Standard Chartered Bank
USD outlook
- USD-positive factors such as de-leveraging and risk reduction continue to impact global markets
- Narrowing rate spreads to the US are also supporting the USD and JPY against the majors
- We expect USD to stabilise in Q2 and accelerate lower from H2
AXJ outlook
- AXJ currencies remain under pressure on fragile risk appetite
- SGD, MYR, TWD, THB and VND look set to underperform on high external demand exposure
- CNY should remain relatively stable vs. USD, but weaken on a NEER basis
- KRW, INR, PHP and IDR should out-perform from Q2
Asian Economy 2009
By Ms. Usara Wilaipich
Senior Economist
Standard Chartered Bank (Thai) Pcl.
- We expect to see weaker growth performance in Asia in 2009.
- Many Asian economies will contract in H1-09 given shrinking exports with higher unemployment, and stabilize in H2-09.
- Growth performance will vary among Asia, depending largely public spending.
- Declining inflation will allow monetary policy race to bottom
Thailand outlook
- Compared with 1997 Tom-Yum-Kung crisis, US subprime crisis will cause limited impact on Thai banking and property sectors.
- However, real sector is likely to be hit harder this time. Export, tourism, and agricultural are among the worst hit sector due to global recession.
- Unemployment could worsen rapidly than the previous crisis.
- For monetary policy easing, we expect to see a lower bottom of Thai policy rate given rising deflation risk.
- Larger current account deficit in 2009 will keep THB in depreciation trend
For further information please contact Standard Chartered Bank (Thai) Corporate Affairs, Thailand:
Supattra Wetchasart Tel: 02 724 8022
[email protected]
Saowarop Panyacheewin Tel: 02 724 8025
[email protected]