Vietnamese exports are regaining momentum, thanks in large part to US demand
We’ve seen enough; downgrading our inflation forecasts for Vietnam
Actual retail sales growth in Vietnam remains in the log single-digit range
The latest slump in Philippine sales is starting to bottom out, just
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Philippine inflation falls back dramatically into the BSP’s target range, thanks to food base effects
The return of transportation and communication deflation in Thailand should be short-lived
Soft start for Singaporean retail sales growth in Q3
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- ASEAN’s PMI slowed noticeably to 51.1 in August from the mid-to-high 51.0 range since May…
- …Vietnam's and Thailand’s PMIs saw the biggest declines from July, but Indonesia is the real worry.
- The deterioration in orders, due to BI’s excessively tight policy stance in Indonesia, is isolated for now.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Indonesia’s PMI is going from bad to worse, hitting the ASEAN headline
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Steady headline masks continued food disinflation in Indonesia
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Unwinding of discrepancy boost in Q2 hides early signs of a revival in consumption.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Continue to ignore; households are still struggling.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesia’s main inflation gauges were unchanged in August: the headline at 2.1% and core at 2.0%…
- …But food inflation remains a big drag and will likely pull the headline below 1.5% at the turn of the year.
- The budget deficit has ballooned this year, but 2025 looks set to see only marginal subsidy reductions.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s Q2 GDP was hit largely by the unwinding of the discrepancy boost, hiding a consumer bump.
- The Q3 PMIs so far point to a further slowdown, and business expectations continue to sour rapidly.
- The pressure on households persists, but the gap between liabilities and asset growth is closing.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
BSP PULLS THE TRIGGER ON RATE CUTS
- …INDIA’S FINAL 2024/25 BUDGET IS NO GAME-CHANGER
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Relax; the trade balance is stabilising.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The Bank of Thailand left its policy rate at 2.50% yesterday in another six-to-one split vote…
- …We got this one wrong, but we continue to believe that 50bp of cuts will be made by year-end.
- The MPC is finally worrying about local demand; better late than never, as exports won’t help.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Thailand’s economy lost momentum in Q2, despite a hefty—but unsustainable—bounce in exports…
- …External demand looks set to stay lacklustre into 2025, weighing further on already-weak capex.
- We remain downbeat on growth, and still see the BoT cutting rates twice before year-end.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Unsustainable export bounce saves Thai Q2 GDP; domestic demand still lethargic
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The BSP pulls the trigger… more—and potentially larger—cuts to come in Q4
Indonesia’s small trade surplus isn’t actually that bad, while the stellar y/y rates need to be put into context
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The BSP started easing policy yesterday; we now expect much larger 50bp cuts from December.
- The ousting of Thai PM Srettha will weigh further on the capex recovery and silence some MPC hawks.
- Indonesia’s July trade data were very mixed; don’t read much into the upside and downside surprises.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The July collapse in inflation in India below the key 4.0% mark, alone, won’t matter to RBI policy.
- A tepid bounce in August, however, with vegetable prices now correcting, would support calls for a cut.
- We also think that this month’s Q2 GDP will disappoint heavily; our final forecast is 6.0%
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Underlying sales momentum in Indonesia was fading heading into Q3
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
