- Taiwan’s exports surprised in May, rising 38.6%, up from 29.9% in April; the front-loading continues…
- …This will likely mean the central bank holds back on easing when it meets next week.
- Thai deflation likely hit a low in May, but the strengthening THB could lead to its return next year.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Probably the low in this brief deflationary episode.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The RBI front-loads most of this year’s remaining cuts
Front-loading of Vietnamese exports to the US continues apace
Latest electricity-price hike nudges Vietnamese inflation up a touch
Vietnamese retail sales are having a torrid Q2
The resurgence in Philippine sales is topping out
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The RBI surprised with a larger 50bp cut to the repo rate, to 5.50%, but hardened its stance to “neutral”.
- We still expect one more 25bp cut, in October, with the MPC underestimating the “space” it has left.
- Ignore Vietnam’s smaller trade surplus in May; the front-loading of exports to the US continues apace.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Taiwan’s CPI moderated sharply to 1.6% in May, due to food, transport and “Liberation Day”.
- Philippine CPI fell to a 5.5-year low in May, but this should be the nadir, as food CPI will soon creep up.
- Indonesia’s U-turn on electricity discounts has compelled us to raise our 2025 CPI call to 1.8%.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
A bounce of sorts, but ASEAN manufacturing is still shaky
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- ASEAN’s manufacturing PMI bounced post-“Liberation Day ” but was still below 50 in May, at 49.2…
- …The region’s outperformers—Singapore and the Philippines—lost steam, giving a smaller cushion.
- Forward-looking indicators continue to sour, but at least inflation pressures are receding still.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The dramatic collapse in Indonesia’s trade surplus in April was down in large part to seasonal noise…
- …Underlying the emerging down-shift are struggling exports and a welcome recovery in imports.
- We have cut our 2025 CPI forecast to 1.5%, in view of the soft May data and the coming utilities relief.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
A partially welcome collapse in Indonesia’s trade surplus
Near-zero inflation is once again around the corner
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Boosted by investment, which can’t be relied upon post-“Liberation Day”.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Disregard completely; household spending is still weakening.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The April collapse in Philippine imports in context
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- GDP growth in India easily beat expectations in Q1, rising to a one-year high of 7.4%, thanks to capex …
- …But the investment outlook has only darkened since, and all the other Q1 details were weak.
- We have nevertheless raised our downbeat 2025 GDP growth forecast to 6.8%, from 5.8%.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s decent April IP is not without its flaws; growth is now tanking at the margin…
- …This emerging softness is due to falling consumer non-durables, masked by flying capital goods.
- Blame seasonal noise for Thailand’s biggest trade deficit in over two years, but US demand is sliding.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Taiwanese retail sales outright contracted in April, due to a drop in discretionary spending…
- …Consumer confidence surveys are turning sour, which will be bad news for already weak spending.
- Malaysian inflation held steady in April; while low, it could be artificially depressed by price controls.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Indian services push the Q2 recovery forward in May
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Back in business; at least 75bp in more cuts to come this year.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Our final forecast for India’s Q1 GDP report sees a dip to 6.0% from 6.2%, below the consensus, 6.7%…
- …The big boost from net trade in Q4 should vanish fully, offset partly by improved local private demand.
- The PMIs suggest the job market is rapidly heating up again, but we still see no hard data confirmation.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: An abysmal start to Q2, but support from energy has been fading for a few months.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
