Big investment rebound drives Indonesia’s Q2 upside surprise
July should mark the low for Philippine inflation, but short-term downside risks dominate
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Early US trade deals in July help ASEAN manufacturing find its feet, for now
Indonesian export growth is in for a weaker H2
Discount the base effects lifting Indonesian food inflation; the headline should now stabilise
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- ASEAN’s manufacturing PMI returned to the black in July, just, for the first time since “Liberation Day ”…
- …But leading indicators remain bleak; the US’s ‘final’ tariffs are at least broadly a win for EM Asia.
- The Monetary Authority of Singapore paused and set a high bar for more easing in the short run.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: A—slightly—more credible print; consumption, in reality, slowed further in Q2.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Philippine trade was flattered hugely by base effects in June
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
BI CUTS IN JULY; NEW BOT CHIEF TO RESTART EASING
- …EARLY Q2 GDP RESULTS ALL SEE UPSIDE SURPRISES
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Two-way trade in the Philippines easily beat the consensus in June, but base effects helped hugely…
- …Still, underlying the inflated headlines are real recoveries in chip exports and capital goods imports.
- Net exports will be the star of the show in next week’s Q2 GDP; we now see the headline at 5.3%.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: A ten-month low, as consumer sectors continue to broadly weaken.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indian IP growth sank to a 10-month low in June, but the huge upgrade to May cushions this blow.
- Overall momentum continues to deteriorate, pouring a lot of cold water over the rosy PMIs…
- …The slump in consumer firms continues, but expect to see ‘better’ manufacturing in Q2 GDP.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesia’s Q2 fiscal belt-tightening is reassuring in terms of policy credibility, if bad for growth,…
- …The urgency to restrain spending should fade from Q3, with revenue growth set to recover gradually.
- The overtly dovish Mr. Vitai has been chosen to head the BoT; we now see two 25bp rate cuts in Q4.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
PMIs indicate a decent start to Q3 for India’s economy
US front-loading in Thailand is still going strong
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s PMIs continued to regain momentum in July on a three-month rolling basis, despite services dip.
- They point to waning downside risk to GDP growth this year, but the clouds over 2026 are darkening.
- Thailand’s near-full Q2 trade data point to a smaller but still-big net GDP boost, at +4.4pp from +7.0pp.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indian core IP growth rose for a second straight month in June, to 1.7%, after its April plunge…
- …Refined petroleum product growth has recovered and should stabilise from here on out.
- Overall momentum is still deteriorating, however, with the electricity slump particularly worrying.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: A skin-deep reprieve, if at all, from waning underlying momentum.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Malaysian GDP growth rose in Q2, beating consensus and exactly matching our 4.5% forecast .
- Still, manufacturing and mining are showing worrying signs and face further headwinds.
- Singapore’s surprisingly strong Q2 GDP likely will be just a respite; expect a sharper slowdown in H2.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Bank Indonesia surprised the thin consensus for a hold yesterday with its fourth 25bp rate reduction…
- …We continue to see an end-2025 rate of 4.75%, especially given BI’s rising anxiety over loan growth.
- Indian net exports were grim in Q2, even with US front-loading, but this won’t be seen year-over-year.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Surprise, surprise… at least two more 25bp cuts to come by year-end.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s two main inflation gauges were very soft in June, with food prices now deflating at all levels…
- …Food deflation at the retail level will likely persist until the end of 2025, due in part to base effects.
- We have downgraded our average CPI forecasts for this year and next to 2.5% and 4.9%, respectively.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Outright food deflation is here, as predicted.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
