Southeast Asia Seen Leading Rate Increases Next Year: Economy

Central banks in Southeast Asia may be forced to abandon this year’s monetary easing and raise interest rates before their north Asian peers in 2013, as rising inflation risks overshadow the current economic gloom.

Thailand, Malaysia, the Philippines and Indonesia will probably raise rates next year, HSBC Holdings Plc, UBS AG, and Australia & New Zealand Banking Group Ltd. predict, even as interest-rate swaps show investors expect little or no tightening. The banks expect China to refrain from changing its monetary policy stance and India to cut borrowing costs.