- A normalisation of monetary policy in India still is around the corner, even if the recovery loses vigour.
- September's CPI and WPI headlines were softer than expected, thanks largely to food base effects.
- Higher core inflation remains likely, with widespread price hikes in the pipeline, and expectations rising.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- In one line: Not exactly a sign that domestic demand is roaring back.
Miguel Chanco (Senior Asia Economist)Emerging Asia
Don’t expect non-core disinflation to help much more in the short run
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The post-Delta bounce in Indian industry is over, with August output eclipsing the pre-virus peak.
- Above-trend monthly gains will now be hard to sustain, especially with households still struggling.
- Capex has been the driver of late, but this too looks set to hit a wall, given more than ample capacity.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- Indonesia's parliament last week approved a host of revenue-raising measures for 2022...
- ...But their impact on the narrowing of the deficit may be trivial, as it has already closed substantially.
- The higher VAT rate is tolerable, given low inflation, while the stable corporate rate isn't a big blow.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- In one line: Don’t forget that the RBI doesn’t think the softness in inflation will last either.
Miguel Chanco (Senior Asia Economist)Emerging Asia
Trade shows that firms fared better than consumers at the height of the Delta squeeze
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The volume of net sales index in the Philippines was largely unscathed by the worst of the Delta scare...
- ...But households relied on savings, again, setting back the longer-term recovery in consumption.
- The current wave has rocked the labour market, though it appears no lasting damage was done.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- In one line: Don’t read too much into the end of G-SAP
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The RBI is widely expected to hold the repo rate tomorrow, but some see a reverse repo rate hike...
- ...We reckon the rate corridor will be returned to the pre-Covid width only when normalisation begins.
- The stage is set for the MPC to turn "neutral" this quarter, though, with inflation expectations soaring.
Miguel Chanco (Senior Asia Economist)Emerging Asia
- India's PMIs for Q3 point to a robust quarterly GDP gain, but don't be shocked if momentum now slows.
- The surprise slip in inflation in the Philippines in September won't be much comfort for the BSP.
- The spike in Thai inflation last month was a one-off, reflecting the expiry of Covid-linked utilities relief.
Miguel Chanco (Senior Asia Economist)Emerging Asia
The post-Delta bounce in Indian services remains strong
The September dip in inflation will be only temporary respite for the BSP
Don’t worry too much about the September spike… uncontrolled inflation in Thailand isn’t on the cards
Miguel Chanco (Senior Asia Economist)Emerging Asia
- The Bank of Thailand's 2021 forecast downgrade doesn't go far enough; Q3 was a catastrophe...
- ...But its 2022 projection is on the low side; an upside surprise would open the door for a rate hike.
- Policy is unlikely to stay ultra-loose longer than needed, as the household debt issue needs action.
Miguel Chanco (Senior Asia Economist)Emerging Asia
A reassuring end to Q3 for ASEAN manufacturing
Don’t expect India’s manufacturing PMI to get any better than this
Early signs of the reopening lift in Indonesia’s CPI breakdown
Miguel Chanco (Senior Asia Economist)Emerging Asia
