Don't lose sleep over Thailand's surprise deficit
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Bank Indonesia is more than ready to unwind Covid support, looking at the full reversal of RRR cuts...
- ...But rate hikes are unlikely until mid-year, in spite of BI's hawkish view on the Fed; thank Omicron.
- Loan growth will surpass BI's 2022 forecast soon, and inflation is unlikely to stay a non-issue for long.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Indonesia's trade surplus collapsed in December, but a January bounce is likely, despite the coal ban.
- Export growth will slow more persistently from Q2, as palm oil and coal prices drag earnings down.
- Net trade probably hit Q4 GDP growth hard, though the comeback in imports is more than welcome.
Miguel Chanco (Senior Asia Economist)Emerging Asia
What happens to Indonesian exports when support from commodities start to fade
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Vietnam's fiscal stimulus for 2022 likely means just a less painful budget consolidation.
- The VAT cut will have a real impact, but the post- Covid priority probably is to manage the debt level.
- India's December price data were softer than expected, but the underlying trends remain hot.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Don't blame Diwali-related calendar effects for the huge miss in India's IP report for November...
- ...Short-term trends continue to weaken, with no real support from households or businesses.
- But a February rate hike still is possible, Omicron permitting, with inflation continuing to rise rapidly.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Retail sales growth in Indonesia is back firmly in the black, and likely ended 2021 on a high note.
- Sales in ex-"Zero Covid"-ers suffered the most during Delta; we see no return to this with Omicron.
- Expect a more broad-based 4.1% quarterly rise for the Philippines' Q4 GDP report, due in two weeks.
Miguel Chanco (Senior Asia Economist)Emerging Asia
Omicron has yet to crash the party in Indonesian households
Real demand for imports in the Philippines pops in November
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The vertical rise in Covid numbers indicates that Omicron has taken full hold in the Philippines...
- ...But it's too soon to say if it will dent net sales; the outbreaks in 2021 were largely a non-factor.
- Catch-up growth should end this quarter, and the outlook beyond this remains uninspiring
Miguel Chanco (Senior Asia Economist)Emerging Asia
Too early to say if Omicron will hinder catch-up growth in PH sales
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The beginnings of an Omicron wave are now visible in India, forcing the reintroduction of soft curbs.
- A repeat of the huge Delta hit to the economy is unlikely, but India is more at risk than most EMs.
- The PMI data for Q4 were solid, but they are now rolling over and look poised for more downside.
Miguel Chanco (Senior Asia Economist)Emerging Asia
Expect India’s services PMI to continue rolling over in Q1
Inflation in Thailand should jump back up in February
The BSP can now breathe easy, but keep an eye on food prices
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The post-Delta rebound in ASEAN manufacturing was robust, with the regional PMI soaring in Q4...
- ...But the end of the honeymoon period is nigh; Omicron is here and new orders are slowing.
- Central banks beware, as we still see no let-up in accelerating upstream and downstream price rises.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Vietnam staged a successful V-shaped recovery in Q4, with GDP more than reversing the first Delta hit.
- Household spending was punchy, and Omicron is unlikely to derail the release of pent-up demand.
- Exports look poised for a fast start to 2022; we have raised our full-year GDP growth forecast to 8.0%.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Low Vax Rates Won't Stop Normalisation...India's Q4 Stall Is Indisputable
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Omicron will be dominant in Thailand, but the tourism recovery is small, so little harm will be done.
- The BoT seems relatively relaxed, for now; it's 2022 downgrades mainly were focused on capex.
- The Q4 post-Delta pop in net trade remains intact, and the 2022 outlook still is encouraging.
Miguel Chanco (Senior Asia Economist)Emerging Asia
