Thailand’s customs trade deficit fell to just $597M in October, thanks to still-helpful seasonal effects...
...This masked an immediate reversal of the unsustainable bounce in exports in September.
Falling imports—in nominal and real terms—likely will drive the “improvement” in the trade balance.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s budget deficit still looks on track to hit this fiscal year’s 6.4% of GDP target, if not to better it...
- ...Underspending, despite this year’s acute burdens, and the post-Covid revenue pop are both helping.
- Remittances in the Philippines are still soaring in peso terms, but 2023 will be a year of slowdown.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesian export growth fell to a 20-month low of 12.3% in October, and more downside is ahead...
- ...The unwinding of the commodities boom is far from over, and Chinese demand is now softening.
- The rise in India’s trade deficit in October is a minor and brief setback; weak flows are the main issue.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Retail sales growth in Indonesia fell in August, but the coming fuel price hit is likely to be trivial.
- The Philippines’ trade deficit continues to feel downward pressure on both sides of the balance.
- Its unemployment rate in August consolidated the fall in July, but note how participation is flying.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The RBI stuck to its 50bp guns on Friday, but dissent is bubbling and a December pivot is likely...
- ...Inflation should continue to undershoot the MPC’s forecasts, and growth is not as strong as it thinks.
- Indonesia’s 2.8% deficit forecast for 2023 is on the high side; lots of space for inflation-fighting moves.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Thailand’s customs trade deficit continued to widen sharply in August, due to the slump in exports...
- ...But shipments should soon stabilise, and the U-turn in surging imports has only just started.
- The SBV’s unexpected rate hike on Friday was more about exchange rate management than inflation.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- We’re sticking to our call for an imminent BSP pause, despite expectations for another 50bp hike...
- ...The peso and FX reserve issue is a distraction; fundamentally, headline inflation is now rolling over.
- A second straight run-of-the-mill 25bp hike by BI this week is likely; we see no need for bigger steps.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesia’s trade surplus beat expectations last month, as predicted, but it will start falling soon...
- ...Commodity prices will be net-negative shortly, offset only partially by EU and Chinese demand.
- Expectations for a current account deficit this year still seem off; that’s a mid-2023 story, at the earliest.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- WPI inflation in India continued to slow sharply in August, with outright deflation now on the horizon....
- ...This should build the case for smaller rate hikes, especially with more cracks showing in RBI unity.
- The trade deficit likely has peaked, thanks to falling oil prices, but don’t expect any help from exports.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
