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Below is a list of our Emerging Asia Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

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21 Oct 2022 Emerging Asia Monitor A Rupiah-Defensive Hike by BI, but the Currency Needs Minimal Help

  • Bank Indonesia raised the seven-day reverse repo rate by 50bp, to 4.75%, in line with expectations...
  • ...But it remains firm that such big moves won’t be the norm; we expect a return to 25bp next month.
  • BI’s concerns over inflation have eased, and we reckon the IDR poses little threat to the outlook.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

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

19 Sept 2022 Emerging Asia Monitor Dear BSP Watchers, No One Ever Really Sees a Turn Until it Happens

  • 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

1 Sept 2022 Emerging Asia Monitor Recession Revealed... Brace for a Q3 Collapse in GDP Growth in India

  • GDP growth in India disappointed in Q2, jumping merely to 13.5%, despite huge Delta base effects.
  • The headline should collapse in Q3, especially with the drag from oil prices persisting until early 2023.
  • The road ahead for consumption and investment will be rockier, rising inflation and credit costs aside.

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

22 Aug 2022 Emerging Asia Monitor Q2 was a Real Turning Point for the Revival in ASEAN Tourism

Tourism in ASEAN is skyrocketing, and we see no reason to panic over Thailand’s underperformance.

Visitors from China aren’t entirely M.I.A., but their near-absence ultimately will impose a hard ceiling.

We maintain that a pause by the BSP is imminent, despite last week’s continued tightening in policy.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

8 Aug 2022 Emerging Asia Monitor Don't Be Surprised if Indonesia Outdoes its Strong Q2 Performance

GDP growth in Indonesia surprised in Q2, as we predicted, accelerating to 5.4% year-over-year.

Consumers and traders were the star of the show, and it’s too soon to write-off the capex recovery.

The RBI opted for a larger-than-expected hike last week, even though it believes inflation has peaked.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

2 Aug 2022 Emerging Asia Monitor Enjoy it While it Lasts... The Stability in ASEAN's PMI in July is a One-Of

ASEAN factories showed welcome stability to start Q3, with the PMI rising for the first time since April...

...But the rebounds in Indonesia and Thailand are one-offs, and most signs still point to a slowdown.

Ignore the hotter July signals for Thai and Philippine inflation; Indonesia’s core rate is reaccelerating.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

1 Aug 2022 Emerging Asia Monitor Less-Dire CPI Data and Outlook Should See Smaller RBI Rate Hikes

Expect the RBI to moderate the speed of tightening this week, with a below-consensus 25bp rate hike.

We look for a positive surprise in Indonesia’s Q2 GDP, with growth rising to 5.5%, from 5.0% in Q1.

The quarterly bump should be huge, thanks to a bounce in public spending and big lift from trade.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

25 July 2022 Emerging Asia Monitor BI Continues to Move the Policy Goalposts, but will Hike, Eventually

Bank Indonesia continued to side with the majority opinion last week, keeping interest rates on hold...

...But the calm in core inflation won’t last long, especially with labour market pressures rebuilding.

The Board can’t just keep raising the target for loan growth; this month’s upgrade will soon be outdated.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

24 June 2022 We're Sticking to our Guns... the BSP will Hold Fire from August

The BSP hiked the ORR by an extra 25bp yesterday, in the face of growing calls for larger increases.

We’re keeping to our call for an August pause; oil disinflation is imminent and Q2 growth is flagging.

A breach of BI’s inflation target is just around the corner, and so is the start of interest rate hikes.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

9 June 2022 Now More a Matter of When, Not If, the BoT will Hike This Year

The Bank of Thailand stood pat yesterday, but signalled explicitly that policy normalisation is afoot.

The big increase in its 2022 inflation forecast adds weight to our view that hikes will be front-loaded.

The Reserve Bank of India hiked by a further 50bp, but the stars are aligning for smaller increases.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

6 June 2022 Expect the RBI and BoT to Shock Markets with 25bp Hikes This Week

We reckon that the RBI will opt for a smaller-than- expected 25bp hike on Wednesday, to 4.65%...

...Recall that only a minority of the MPC is trigger-happy, and recent policy moves are disinflationary.

The case for an unexpected higher turn in BoT policy has grown since the last meeting in March.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

25 May 2022 BI's Higher RRR Hikes Should Temper 2022 Rate Expectations

Bank Indonesia kept its policy rate steady, at 3.50%, despite growing expectations of an imminent hike.

The Board laid out a more aggressive schedule for RRR increases, though, with credit growth flying...

...This, plus a less-troubling inflation outlook, should rein in expectations for a total of three hikes in H2.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

23 May 2022 An RBI Hike in June is No Done- Deal, with the MPC Split 3 Ways

The minutes of the RBI’s hike in May show that only a minority of members are gung-ho on inflation.

India’s unusually big budget gap in February is due to transfers to states; time for forecast revisions.

Indonesia’s current account narrowed further in Q1, but we now expect a full-year surplus for 2022.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

20 May 2022 BSP Policy has Turned, but Expect Only One More Rate Hike This Year

The Bangko Sentral ng Pilipinas raised the overnight reverse repo rate by 25bp, to 2.25%...

...We see just one more hike this year, versus the consensus for three, as H2 will be very different.

A weak Q2 GDP report and the impending U-turn in oil inflation should force a pause in August.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

16 May 2022 Faster Inflation and a Higher Terminal RBI Rate are in the Pipeline

We have raised our average inflation forecast for India in 2022, to 7.5%, following the April surprise.

The worst of oil pressures is over, but food inflation is broadening and core inflation is hardening.

We now also expect sustained rate hikes from August, with a higher terminal policy rate of 5.90%.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

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