23 Sept 2022 Emerging Asia Monitor Bank Indonesia's Surprise 50bp Salvo is a One-Off, by Definition

• Bank Indonesia surprised markets yesterday, hiking its benchmark rate by 50bp, to 4.25%...
• ...But we see no appetite for this to be the norm; BI easily would ditch the focus on core, if convenient.
• The BSP’s ongoing worries over inflation make no sense, given the global trends in oil and food prices.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

14 Sept 2022 Emerging Asia Monitor The August Inflation Rebound is No Cereal Killer for Smaller RBI Hikes

• CPI inflation in India surprised slightly to the upside in August, refuelling calls for a 50bp rate hike...
• ...But we’re sticking to our 25bp call; the jump in food inflation likely is a one-off, and core is steady.
• The July crash in industrial growth was more than a base effect story, as output clearly is stagnating.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

6 Sept 2022 Emerging Asia Monitor Indonesia Aside, the Inflation News in ASEAN is Generally Reassuring

• Indonesia’s fuel price hikes, à la 2014 in size, likely will mean a front-loading of BI’s tightening cycle.
• Inflation in Thailand hit a new multi-year high in August, but prolonged and rapid disinflation is nigh.
• The price sub-indices of the ASEAN-wide PMI continue to show that the worst of the crisis is over.
   

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

5 Sept 2022 Emerging Asia Monitor Thai Consumers aren't Immune to Inflation, but a Cushion is Forming

• Base effects are flattering Thai consumption, but the inflation bite is coming, lasting well into 2023.
• Food prices, the largest driver of the rise in inflation in Indonesia, appear finally to have turned a corner.
• India’s urban unemployment rate fell further in Q2, to a series low, despite the economy’s soft patch.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

25 Aug 2022 Emerging Asia Monitor Vietnam's Public Debt Fell Trivially in 2021, but Consolidation Now is Real

Don’t set store by the reported plunge in Vietnam’s public debt-to-GDP ratio in 2021 to a record low...

...Remember that the denominator is inflated; falling external and secured debt remain the key themes.

Fiscal consolidation in the first half of 2022 was sharp, thanks largely to a strong revival in revenue.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

24 Aug 2022 Emerging Asia Monitor BI has Joined the Party, but Expect Only One More Rate Hike this Year

Bank Indonesia defied the consensus yesterday, as we expected, enacting its first rate hike, to 3.75%...

...But we’re sticking to our below-consensus view for just one more hike this year; policy is quite tight.

The Board can also rely credibly on sustained fiscal support, with consolidation well ahead of schedule.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia