(Dec 20): Southeast Asia is set for another year of low inflation, generating difficult choices for the region’s central banks.
S&P Global Ratings sees inflation remaining below central bank targets in most cases in 2020, according to Shaun Roache, S&P’s chief APAC economist in Singapore. Policy makers may soon have to think about using tools other than interest rates to achieve their policy goals, he said.
“The story will quickly turn to ‘Plan B,’ which could be some combination of forward guidance, negative rates and quantitative easing, even in an emerging market like Thailand,” he said in an email. “This could be the big story of 2020.”