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Chong Hoon ParkHead of Korea Economic Research
Standard Chartered Global ResearchOctober 2019
Economic outlookWeakening growth, rising risks
Global overview
Slower growth, escalating risks
Source: IMF, Standard Chartered Research 3
Growth in most G20 economies to remain below past 10Y averages in 2019 and 2020GDP, % y/y
3.2
-4
-2
0
2
4
6
8
10
CN IN ID US BR KR CA AU MX RU UK EA JP ZA TR AR SA
2018 20192020 10Y avg2019 global growth
We expect inflationary pressure to remain subdued in 2019 and 2020 given soft economic growthInflation, % y/y
-4
-2
0
2
4
6
8
10
12
14
16
18
TR RU ZA MX BR IN ID CN UK CA AU US EA JP KR SA
2018 2019 2020 10Y avg
US-China trade war – Its lasting impact
Note: NBER recession is a binary series (1 for recession, 0 for no recession); Source: NBER, Standard Chartered Research
4
US 6M and 12M recession probabilities have risen in recent months (%)
Euro-area 3M and 6M recession probabilities remain low; 12M model is volatile (%)
Note: CEPR recession is a binary series (1 for recession, 0 for no recession; Source: CEPR, Standard Chartered Research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jul-78 Jul-84 Jul-90 Jul-96 Jul-02 Jul-08 Jul-14 Jul-20
NBER Recession Probit 12 Probit 6 Probit 3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aug-99 Aug-02 Aug-05 Aug-08 Aug-11 Aug-14 Aug-17 Aug-20
CEPR Recession Probit 12 Probit 6 Probit 3
US raises barriers on key trading partners
*Red up arrow means that the trading partner was affected by more new US trade discriminatory measures in 2018 than the average of 2012-17 Source: Global Trade Alert, Standard Chartered Research
5
Rising trade protectionism2018 US top importers and number of new discriminatory measures introduced in 2018
Within our sample, China faced the largest number of discriminatory trade measures by the US in 2018; it also faced the largest increase vs 2012-17
CN 138
MX 86
CA 89
JP 80 DE 87 KR 85 UK 76 IE 51
NL 73 SG 57
US imports from trading partner(USD 1bn)
Number of new discriminatory measures taken by the US that affected each trading partner in 2018
##
BR 60 TH 75 MY 58 CH 63
TW 3
VN 69
FR 77
IN 88IT 88
India is a bigger contributor to global growth than the US
Source: Bloomberg, IMF, Standard Chartered Research
6
China is the largest contributor to global growth in both market exchange rate and PPP terms% contribution to global GDP (market exchange rates)
China and India contribute c.55% of world GDP growth % contribution to global GDP (PPP exchange rates)
Source: Bloomberg, IMF, Standard Chartered Research
20192020
0%
5%
10%
15%
20%
25%
30%
35%
40%
China US India Euro area ASEAN-6 Latam
2019 2020
0%
5%
10%
15%
20%
25%
30%
35%
40%
China India US ASEAN-6 Euro area Latam
India contributes more to world GDP growth in PPP terms than the US
Digging deeper into the policy toolkit
*Refers to ECB deposit rate; Source: Bloomberg, Standard Chartered Research 7
Where we still expect rate cuts in 2019, and by how much (bps)
-175
-150
-125
-100
-75
-50
-25
0
BR IN MX AU ID PH NZ US ZA KR TH MY EA
Cuts already delivered in 2019
Expected for the rest of 2019 (our forecast)
*
More extreme forms of policy stimulus may be needed
Note: A negative number means the cost of borrowing is lower than GDP growth; Source: Standard Chartered Research 8
Fiscal room to borrow and spend across DM and most EMReal policy rates minus GDP growth, 2019F
-6
-5
-4
-3
-2
-1
0
1
2
3
AU NZ EA UK US JP IN PH VN ID TH MY TW KR BR LK ZA MX
DM EM
South Korea – Downside risks
Weak inflation and trade dynamics
Source: Bloomberg, Standard Chartered Research 10
Core inflation has fallen to a 20-year low% y/y
External trade has been contracting% y/y
CPI % y/y
Core CPI % y/y
PPI % y/y
-1
0
1
2
3
4
5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
Exports % y/y
Imports % y/y
-30
-20
-10
0
10
20
30
40
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
Exports to China, semiconductor market remain weak
Source: Bloomberg, Standard Chartered Research 11
Korea’s exports to China have been falling Exports, USD bn (LHS); index (RHS)
Global semiconductor sales under pressureSales, USD bn (LHS); index (RHS)
China PMI
Korea export to China (RHS)
6
7
8
9
10
11
12
13
14
15
16
48.0
48.5
49.0
49.5
50.0
50.5
51.0
51.5
52.0
52.5
Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19
Global semiconductor
sales
Philadelphia semiconductor
index200
400
600
800
1,000
1,200
1,400
1,600
1,800
20
25
30
35
40
45
May-11 May-13 May-15 May-17 May-19
Job market improves, while sentiment is weak
Source: Bloomberg, Standard Chartered Research 12
Retail sales and sentiment heading south Retail sales, KRW bn (LHS); CCI index (RHS)
Job market recovers New hires, ’000 people (RHS);’unemployment, % (LHS)
Retail sales KRW bn
Consumer confidence index (RHS)
80
85
90
95
100
105
110
115
30,000
32,000
34,000
36,000
38,000
40,000
42,000
Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
New hires, '000 (RHS)
Unemployment rate % SA
0
100
200
300
400
500
600
700
800
900
2.5
3.0
3.5
4.0
4.5
5.0
Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
Fiscal support is likely to act as a cushion
13
Supplementary budget disbursementKRW tn
Large increase in budget growthTotal annual fiscal expenditure, % y/y
Source: BoK, Statistics Korea, Standard Chartered Research
350
400
450
500
2015 2016 2017 2018 2019
Planned fiscal budget Supplementary budget
0
2
4
6
8
10
12
2011 2012 2013 2014 2015 2016 2017 2018 2019
Forecasting FX
Forecasting long-term FX using macro drivers
We incorporate the following macro drivers into our long-term FX forecasts§ Real GDP growth differentials§ Real wealth per capita§ Relative inflation rates
15
2018FX strategy
forecast
2019FX strategy
forecast
2020FX strategy
forecast
2020Implied
RER
2020Economics
inflationforecast 2021
Economicsmacro forecast 2021
FVX RERforecast
2021FVX NERforecast
202XEconomics
macro forecast
202XFVX RERforecast
2021Economics
inflationforecast
202XFVX NERforecast
202XEconomics
inflationforecast
Empirical coefficients
§ Behavioral equilibrium exchange rate (BEER) – medium- to long-term fair value justified by macroeconomic fundamentals
§ 31 currencies – covering 72% of global trade and 98% of global foreign exchange turnover
Real GDP growth
differentialsReal wealth per capita
Government consumption Terms of trade Trade
openness NIIP
Backtesting this approach
1. Backtest§ Use data published at end 2015 for
2016, 2017 and 2018
§ Economics forecasts for GDP and CPI§ FX analyst forecasts for FX rates
2. Machine beats man
Quant versus analystRoot mean square error (%)
Quant vs actual
Analyst vs actual
0%
5%
10%
15%
20%
25%
2016 2017 2018
Rates markets are telling us something is wrong
Source: Bloomberg, Standard Chartered Research 18
Global bond markets and yield curves reach new extremes UST yield curve, 3M/10Y, bps (LHS) vs negative-yielding debt, % of index (RHS)
UST yield curve, 3M/10Y (LHS)
Neg yield debt, % (RHS, inverted)
0
5
10
15
20
25
30
35-50
0
50
100
150
200
250
Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19
Manufacturing is weak, but the rest of the US economy is OK
Source: Bloomberg, Standard Chartered Research 19
From ‘Trump bump’ to ‘Trump dump’?Yield, % (US tariffs on USD 200bn of China’s goods)
1.00
1.50
2.00
2.50
3.00
3.50
45
47
49
51
53
55
57
59
61
63
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
ISMmanufacturing
10Y USTyield (RHS)
US presidential election
10% tariffs
25% tariffs
10% tariffson final
USD 300bn
Consensus still sees only a modest US slowdown Consensus annual GDP growth – survey average, %
1.5
1.7
1.9
2.1
2.3
2.5
2.7
Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19
2019
2020
2021
Stocks and employment are holding up…
Source: Bloomberg, Standard Chartered Research 20
Different messages from bonds and equities 10Y UST BE, % (LHS) vs S&P cyclical/defensive ratio (RHS)
10Y UST breakeven
(LHS)
S&P 500 Cyclical/defensive
ratio (RHS)
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
Stocks and jobs are still okay S&P 500 (LHS) vs initial jobless claims, inverted, ’000 (RHS)
S&P 500 (LHS)
Initial claims, 4wk average
(RHS)
200
210
220
230
240
250
260
270
280
290
3001,800
2,000
2,200
2,400
2,600
2,800
3,000
3,200
Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19
… but the strong USD is becoming a problem
Source: Bloomberg, Standard Chartered Research 21
USD is approaching levels of export concernIndex, 31-Jul-2019 =100
When do fiscal deficits matter for the USD?USD narrow TWI (LHS) vs US fiscal + C/A deficits, % of GDP (RHS)
USD TWI (LHS)
US twin deficits (RHS)
-14
-12
-10
-8
-6
-4
-2
0
2
50
60
70
80
90
100
110
120
130
140
150
Mar-74 Mar-79 Mar-84 Mar-89 Mar-94 Mar-99 Mar-04 Mar-09 Mar-14 Mar-19
Fed nominal broad index
Fed real broad index
70
75
80
85
90
95
100
105
110
Jan-99 Jan-03 Jan-07 Jan-11 Jan-15 Jan-19
A strong USD is bad for EM and earnings
Source: Bloomberg, Standard Chartered Research 22
Strong USD weighs on EM equity performanceBroad USD TWI (LHS) vs MSCI EM/DM ratio (RHS, inverted)
MSCI EM/DM (RHS,
inverted)
Broad USD TWI (LHS)
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.090
100
110
120
130
140
Jan-00 Jan-03 Jan-06 Jan-09 Jan-12 Jan-15 Jan-18
A strong USD will also weigh on S&P revenuesS&P revenue/share, y/y (LHS) vs USD y/y (RHS, inverted)
S&P revenue/share,
y/y (LHS)
USD y/y (RHS,
inverted)
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%-15%
-10%
-5%
0%
5%
10%
15%
May-06 May-09 May-12 May-15 May-18
China – Recovery delayed
*end-period; Source: Standard Chartered Research
23
China macroeconomic forecasts Export contribution to GDP growth likely to fallContribution of net exports to GDP growth, ppt
Source: CEIC, Standard Chartered Research
2019 2020 2021
GDP growth (real % y/y) 6.2 6.2 6.0
CPI (% annual average) 2.5 2.5 2.5
Policy rate (%)* 1.50 1.50 1.50
USD-CNY* 7.23 7.32 7.35
Current account balance (% GDP) 1.0 0.5 0.0
Fiscal balance (% GDP) -6.5 -6.5 -5.0
-1.0
-0.5
0.0
0.5
1.0
1.5
2011 2012 2013 2014 2015 2016 2017 2018 2019
Full-year
H1-2019
Growth concerns and trade are headwinds to CNY appreciation…
24
China credit growth weighs on producer prices China M2, y/y (LHS) vs China PPI, 6M lag, y/y (RHS)
China commodity demand and front-loading of imports; China iron ore imports (LHS) vs China FAI growth, % (RHS)
Source: Bloomberg, Standard Chartered Research
China M2 (LHS)
China PPI (RHS)
-10
-5
0
5
10
15
5
10
15
20
25
30
35
Jun-00 Jun-03 Jun-06 Jun-09 Jun-12 Jun-15 Jun-18
Iron ore imports (lhs)
(LHS)
FAI (RHS)
0.0
5.0
10.0
15.0
20.0
25.0
-20
-15
-10
-5
0
5
10
15
20
25
30
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Capital outflow pressure remains modestEstimated monthly capital flows tracker, CNY bn
… but capital outflow pressure remains contained
Source: Bloomberg, Standard Chartered Research 25
China FX reserves stabiliseMonthly capital flows vs FX reserves, USD bn
Monthly capital flows
(RHS)
FX reserves(LHS)
-200.0
-150.0
-100.0
-50.0
0.0
50.0
100.0
2,600
2,800
3,000
3,200
3,400
3,600
3,800
4,000
4,200
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19-200
-160
-120
-80
-40
0
40
80
120
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Trade balanceServices trade balanceNet FDI flowsNon-FDI flowsChange in PBoC FX assets
Non-FDI flows = Change in PBoC FX assets – Trade balance –Services trade balance – Net FDI flows
KRW remains at risk
Source: Bloomberg, Standard Chartered Research 26
Persistent trade weakness poses risks to KRWSouth Korea first 20 days’ exports (% y/y) vs China export PMI
Korea preliminary exports y/y (LHS)
China new export orders PMI (RHS)
45
46
47
48
49
50
51
52
53
-30
-20
-10
0
10
20
30
40
50
60
Jan-11 Mar-12 May-13 Jul-14 Sep-15 Nov-16 Jan-18 Mar-19
Cumulative equity flows
(LHS)
KOSPI (RHS)
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
-5
0
5
10
15
20
25
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19
Tracking EM positioningCumulative equity flows, USD bn (LHS) vs KOSPI (RHS)
Forecasts and reference tables
Forecasts – Economies
^ US: Core PCE deflator used for inflation, * Bangladesh, Egypt, and Pakistan: Figures are for fiscal year ending in June of year shown in column heading** India: Figures are for fiscal year starting in April of year shown in column heading, *** Ghana inflation under review# Global and regional GDP forecasts are calculated by taking the weighted average of economies’ GDP in PPP terms, while regional inflation forecasts are calculated by taking the simple average of economies’ inflation; Source: Standard Chartered Research
28
County Real GDP growth (%) Inflation (yearly average %) Current account (% of GDP)2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Majors# 2.3 2.2 1.6 1.3 1.2 1.5 1.7 1.5 1.7 1.7US^ 2.3 2.9 2.2 1.8 1.2 1.6 2.0 1.7 1.8 1.6 -2.3 -2.8 -3.0 -2.8 -2.3Euro area 2.4 1.9 1.1 0.7 1.2 1.5 1.8 1.3 1.3 1.5 3.5 2.9 2.8 2.7 2.6Japan 1.9 0.8 0.8 1.0 1.0 0.5 1.0 0.8 1.1 1.0 4.0 3.5 3.3 3.5 3.5UK 1.8 1.4 1.1 0.5 1.0 2.7 2.5 2.0 2.3 2.0 -3.3 -3.9 -4.3 -4.2 -4.0Canada 3.0 2.4 1.8 1.7 1.7 1.6 1.9 1.8 1.8 1.8 -2.5 -2.0 -2.0 -2.3 -2.0Switzerland 1.6 2.8 1.4 1.4 1.6 0.5 0.9 0.8 1.3 1.3 6.7 8.0 10.6 10.3 10.0Australia 2.4 2.7 1.7 2.2 2.6 1.9 1.9 1.7 2.1 2.3 -2.6 -2.2 -0.1 -0.3 -0.3New Zealand 2.8 2.8 2.3 2.1 2.3 1.9 1.6 1.6 1.8 2.0 -2.9 -3.7 -3.4 -3.1 -3.2
Asia# 6.3 6.1 5.6 5.8 5.8 2.7 2.7 2.4 2.9 3.2Bangladesh* 7.3 7.8 7.5 7.8 7.7 5.4 5.8 5.5 6.0 6.0 -0.5 -3.3 -2.4 -2.5 -2.8China 6.8 6.6 6.2 6.2 6.0 1.6 2.1 2.5 2.5 2.5 1.4 0.4 1.0 0.5 0.0Hong Kong 3.8 3.0 0.5 1.5 2.3 1.6 2.4 2.3 2.3 2.3 4.7 4.3 3.5 3.5 4.0India** 7.2 6.8 6.2 6.7 7.0 3.6 3.4 3.7 4.0 4.0 -1.8 -2.1 -2.0 -2.1 -2.2Indonesia 5.1 5.2 5.0 5.1 5.2 3.8 3.2 3.2 3.5 3.5 -1.7 -3.0 -2.8 -2.7 -2.5Malaysia 5.9 4.7 4.6 4.5 4.7 3.8 1.0 1.0 2.4 2.4 3.0 1.6 2.2 2.3 3.0Philippines 6.7 6.2 5.8 6.3 6.3 3.2 5.2 2.5 3.4 4.0 -0.8 -2.4 -1.7 -2.3 -1.0Singapore 3.6 3.2 0.8 1.5 1.8 0.6 0.4 0.8 1.6 1.2 19.3 19.0 18.0 17.0 17.0South Korea 3.1 2.7 1.9 2.4 2.5 1.9 1.5 0.7 1.3 1.6 5.6 4.5 4.0 3.7 3.5Sri Lanka 3.1 3.2 2.6 3.2 3.8 6.3 4.4 4.5 4.7 5.0 -2.6 -3.2 -2.6 -2.5 -2.5Taiwan 3.1 2.6 2.4 2.2 2.5 0.7 1.4 0.7 1.0 1.3 14.4 12.2 10.0 10.0 9.0Thailand 4.0 4.1 3.0 3.5 4.0 0.7 1.1 1.0 1.5 2.0 9.7 6.4 5.0 3.0 -0.8Vietnam 6.8 7.1 6.9 6.9 6.9 3.5 3.5 2.5 4.0 5.4 3.0 3.7 3.0 3.0 3.0
MENAP# 3.2 3.1 1.4 2.6 3.1 4.8 5.6 3.7 4.3 4.2Bahrain 3.8 1.8 1.5 2.0 2.2 1.4 2.1 1.4 1.5 1.6 -4.0 -5.8 -3.2 -3.1 -2.9Egypt* 4.2 5.3 5.6 5.8 6.0 23.3 21.6 13.9 7.5 8.6 -6.1 -2.4 -2.5 -2.4 -2.0Iraq 1.0 3.0 4.0 4.0 4.5 0.2 1.0 1.5 1.5 1.5 -4.5 1.5 2.0 3.0 3.5Jordan 2.1 1.9 2.0 2.2 2.6 3.3 4.5 0.4 1.9 2.6 -10.6 -6.7 -7.0 -7.6 -7.3Kuwait -3.5 1.2 0.0 2.5 2.9 1.6 0.6 1.0 1.2 0.8 8.0 14.4 8.8 11.0 10.4Lebanon 0.6 1.0 -1.0 1.5 2.5 4.5 6.1 2.8 3.3 3.5 -22.5 -23.5 -23.2 -23.0 -20.0Oman 0.6 1.9 2.3 3.0 3.5 1.6 0.9 1.6 2.0 2.0 -10.5 -5.0 -3.1 -2.2 -2.0Pakistan* 5.2 5.5 3.3 2.0 3.0 4.1 3.9 7.3 10.7 8.5 -4.1 -6.3 -4.8 -3.1 -2.1Qatar 1.6 1.6 2.0 2.0 2.1 0.4 0.6 -0.5 1.0 1.5 3.8 8.7 7.5 8.9 9.0Saudi Arabia -0.7 2.2 -0.1 2.3 2.6 -0.9 2.5 -1.4 1.7 2.2 1.5 9.1 6.2 7.2 6.0Turkey 7.4 2.7 -0.6 1.5 2.5 11.1 16.2 15.7 15.0 12.0 -5.6 -3.9 -0.6 -1.3 -1.5UAE 0.5 1.7 1.7 2.1 1.9 2.0 3.1 -1.7 1.4 2.7 7.3 9.1 8.4 7.8 5.9
Forecasts – Economies (cont’d)
29
^ US: Core PCE deflator used for inflation, * Bangladesh, Egypt, and Pakistan: Figures are for fiscal year ending in June of year shown in column heading** India: Figures are for fiscal year starting in April of year shown in column heading, *** Ghana inflation under review# Global and regional GDP forecasts are calculated by taking the weighted average of economies’ GDP in PPP terms, while regional inflation forecasts are calculated by taking the simple average of economies’ inflation; Source: Standard Chartered Research
County Real GDP growth (%) Inflation (yearly average %) Current account (% of GDP)2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Africa# 2.3 2.6 2.8 3.5 3.9 9.2 7.0 6.9 6.3 6.2Angola -1.5 -1.1 0.2 2.0 2.5 31.7 18.0 16.5 10.8 7.6 -4.8 -0.4 -1.0 -0.5 -0.5Botswana 2.9 4.5 3.8 4.2 4.5 3.3 3.3 2.9 3.1 3.0 5.3 1.9 0.9 1.8 3.1Cameroon 3.2 3.8 4.2 4.5 5.3 0.7 1.1 1.5 2.0 2.0 -2.5 -3.5 -3.0 -2.5 -3.0Côte d’lvoire 7.8 7.5 7.0 7.0 6.5 1.0 2.0 2.0 2.0 2.0 -2.1 -4.7 -4.0 -4.0 -3.5The Gambia 4.6 6.6 4.5 4.9 5.2 8.1 6.5 6.7 6.1 6.3 -19.3 -18.5 -14.1 -14.4 -13.5Ghana 8.1 5.6 5.8 6.2 6.6 0.0 0.0 0.0 0.0 0.0 -4.6 -4.5 -5.5 -6.0 -6.0Kenya 4.7 6.0 5.6 5.8 5.4 8.0 4.7 5.2 4.5 5.8 -6.2 -5.2 -4.5 -4.6 -4.8Nigeria 0.8 1.9 2.4 3.0 3.5 16.5 12.2 11.1 9.1 9.4 2.8 2.5 -0.2 -0.8 0.0Sierra Leone 3.8 3.7 5.5 5.8 6.0 18.2 17.2 15.7 11.6 11.1 -21.5 -17.2 -15.5 -13.6 -12.8South Africa 1.3 0.7 0.7 1.8 2.0 5.3 4.7 4.1 4.5 4.4 -2.5 -3.5 -3.6 -3.7 -3.8Tanzania 7.1 7.0 6.6 6.5 6.8 5.5 3.5 4.7 6.4 5.5 -2.8 -6.0 -5.6 -5.5 -5.5Uganda 5.0 6.0 5.8 6.2 6.5 5.6 2.7 3.4 5.1 6.2 -5.4 -6.1 -7.7 -8.8 -8.3Zambia 3.5 3.7 2.0 3.0 3.6 6.6 7.5 9.1 11.0 11.6 -3.0 -3.0 -2.0 -3.0 -2.0Zimbabwe 4.7 3.6 -6.0 1.0 3.2 0.9 10.5 199.8 125.0 12.4 -4.1 -5.8 -3.7 -4.4 -4.9
Emerging Europe# 2.4 2.4 2.1 2.2 2.0 2.6 2.7 3.0 2.9 2.9Czech Republic 4.4 3.0 2.5 2.4 2.2 2.5 2.1 2.7 2.0 2.0 1.6 0.6 0.1 0.2 0.2Hungary 4.2 4.9 4.4 3.0 2.7 2.3 2.9 3.4 3.0 3.0 2.8 0.4 1.8 2.0 2.2Poland 4.6 5.1 4.2 3.4 2.8 2.0 1.7 1.9 2.5 2.5 0.2 -0.3 -0.5 -0.2 -0.1Russia 1.6 2.3 1.2 1.7 1.7 3.7 2.9 4.8 4.0 4.0 2.1 7.1 5.6 4.0 3.8
Latin America# 1.7 1.4 0.8 1.9 2.5 7.0 7.9 10.3 7.0 5.9Argentina 2.7 -2.5 -1.0 2.5 2.5 23.3 31.8 46.0 26.0 18.0 -5.1 -5.8 -2.5 -2.5 -2.5Brazil 1.1 1.1 1.0 2.1 2.5 3.4 3.7 3.9 4.0 4.0 -0.4 -0.8 -1.3 -1.7 -2.0Chile 1.3 4.0 3.5 3.0 3.0 2.2 2.3 2.3 2.9 2.8 -2.1 -3.2 -3.5 -3.0 -2.5Colombia 1.8 2.7 3.0 3.2 3.5 4.3 3.2 3.7 3.5 4.0 -3.3 -3.9 -4.1 -3.6 -4.0Mexico 2.0 2.0 -0.1 0.8 2.0 6.0 4.9 3.8 3.5 3.6 -1.7 -1.7 -1.5 -1.3 -1.3Peru 2.5 4.0 2.0 2.8 3.3 2.8 1.3 2.3 2.2 2.7 -1.2 -1.5 -2.0 -2.2 -2.5
Global# 3.9 3.7 3.2 3.3 3.4
Forecasts – FX
Source: Standard Chartered Research 30
Country Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 2019 2020 2021 2022 2023Majors
Euro area 1.07 1.09 1.11 1.13 1.15 1.07 1.15 1.15 1.15 1.15Japan 105.0 104.0 102.0 100.0 100.0 105.0 100.0 99.50 98.80 98.10UK 1.17 1.20 1.24 1.28 1.32 1.17 1.32 1.32 1.31 1.31Canada 1.33 1.33 1.29 1.27 1.25 1.33 1.25 1.25 1.25 1.25Switzerland 1.00 0.96 0.96 0.96 0.96 1.00 0.96 0.96 0.95 0.95Australia 0.67 0.68 0.69 0.70 0.70 0.67 0.70 0.70 0.69 0.69New Zealand 0.63 0.64 0.64 0.65 0.65 0.63 0.65 0.65 0.64 0.64
AsiaBangladesh 85.50 86.00 87.00 88.00 89.00 87.00 92.00 94.00 96.00 97.00China 7.23 7.28 7.33 7.35 7.32 7.23 7.32 7.35 7.30 7.20CNH 7.23 7.28 7.33 7.35 7.32 7.23 7.32 7.35 7.30 7.20Hong Kong 7.83 7.83 7.83 7.82 7.80 7.83 7.80 7.80 7.80 7.80India 73.00 72.00 74.00 75.00 76.00 73.00 76.00 77.60 79.50 81.40Indonesia 14,200 14,300 14,400 14,500 14,600 14,200 14,600 14,810 15,050 15,290Malaysia 4.25 4.20 4.20 4.15 4.10 4.25 4.10 4.15 4.15 4.20Philippines 52.00 52.50 53.00 54.00 55.00 52.00 55.00 56.00 56.60 56.80Singapore 1.41 1.40 1.40 1.39 1.38 1.41 1.38 1.38 1.38 1.38South Korea 1,210 1,220 1,230 1,240 1,250 1,210 1,250 1,250 1,250 1,250Sri Lanka 183.0 184.0 185.0 187.0 190.0 180.0 190.0 196.0 202.0 208.0Taiwan 31.60 31.80 32.00 32.00 32.00 31.60 32.00 31.80 31.50 31.40Thailand 31.00 31.00 32.00 33.00 33.50 31.00 33.50 33.80 34.10 34.55Vietnam 23,100 23,000 23,000 22,900 22,700 23,100 22,700 21,500 21,300 21,200
MENABahrain 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38Egypt 17.50 17.60 17.80 17.90 18.00 17.50 18.00 18.40 18.60 18.78Iraq 1,182 1,182 1,182 1,182 1,182 1,182 1,182 1,182 1,182 1,182Jordan 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71 0.71Kuwait 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30Lebanon 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508Oman 0.39 0.39 0.39 0.39 0.39 0.39 0.39 0.39 0.39 0.39Pakistan 162.0 166.0 170.0 174.0 178.0 170.0 178.0 186.0 194.0 202.0Qatar 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64 3.64Saudi Arabia 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75Turkey 5.70 5.80 5.90 6.00 6.10 5.70 6.10 6.40 6.70 7.00UAE 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67 3.67
Forecasts – FX (cont’d)
Source: Standard Chartered Research 31
Country Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 2019 2020 2021 2022 2023Africa
Angola 370.0 375.0 380.0 385.0 385.0 370.0 385.0 395.0 400.0 410.0Botswana 10.81 11.00 11.09 10.86 10.78 10.81 10.78 10.96 11.27 11.65Cameroon 613.0 601.8 591.0 580.5 570.4 613.0 570.4 570.4 570.4 570.4Côte d’lvoire 613.0 601.8 591.0 580.5 570.4 613.0 570.4 570.4 570.4 570.4The Gambia 53.50 54.15 55.01 55.83 56.97 53.50 56.97 59.84 63.00 64.50Ghana 5.60 5.90 6.10 6.25 6.45 5.60 6.45 6.60 6.90 7.20Kenya 104.3 104.5 104.9 105.3 105.6 104.3 105.6 106.0 107.5 108.5Nigeria 364.0 365.0 367.0 367.0 370.0 364.0 370.0 375.0 379.0 381.0Sierra Leone 9,160 9,345 9,687 9,934 10,296 9,160 10,296 10,656 10,901 11,038South Africa 14.60 14.80 14.70 14.60 14.50 14.60 14.50 14.80 15.10 15.50Tanzania 2,310 2,330 2,350 2,360 2,370 2,310 2,370 2,400 2,490 2,520Uganda 3,730 3,760 3,820 3,840 3,880 3,730 3,880 4,010 4,100 4,200Zambia 13.30 13.60 13.70 14.20 14.40 13.30 14.40 14.60 15.00 15.50Zimbabwe 12.00 12.60 13.20 13.60 14.00 12.00 14.00 15.00 17.00 18.00
EuropeCzech Republic 24.21 23.67 23.15 22.65 22.17 24.21 22.17 22.20 22.20 22.20Hungary 308.0 300.0 293.0 285.0 278.0 308.0 278.0 280.0 282.0 284.0Poland 4.07 3.97 3.87 3.78 3.70 4.07 3.70 3.72 3.73 3.74Russia 65.00 64.50 64.00 63.50 63.00 65.00 63.00 64.40 65.00 65.70
Latin AmericaArgentina 65.00 70.00 75.00 75.00 80.00 65.00 80.00 86.20 93.30 101.0Brazil 3.90 3.85 3.85 3.80 3.95 3.90 3.95 4.05 4.15 4.25Chile 740.0 750.0 750.0 725.0 775.0 740.0 775.0 775.0 785.0 795.0Colombia 3,350 3,400 3,450 3,250 3,200 3,350 3,200 3,290 3,360 3,440Mexico 20.00 20.25 20.50 20.50 20.75 20.00 20.75 21.00 21.40 21.75Peru 3.45 3.50 3.50 3.40 3.60 3.45 3.60 3.65 3.70 3.75
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Chong Hoon Park is/are employed as an Economist(s) by Standard Chartered Bank Korea and authorised to provide views on Korean macroeconomic topics only.
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Disclosures appendix
