- In one line: Keeping its powder dry, but we’re not quite sure why.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Bank Indonesia left the BI rate at 5.75% for a second meeting, against our minority rate-cut call.
- We still expect 100bp in total easing this year; the consensus on 2025 inflation remains way too high.
- The equity sell-off will add more urgency to cuts, as it’s deep enough to have real implications for capex.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s deficit consolidated in February to its smallest since mid-2021, as imports tanked…
- …But much of this was due to ongoing corrections in oil and gold imports; exports rebounded too.
- Non-oil and gold merchandise imports, plus imports of services, are still on a firm upward trend.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: No need to panic over the nosedive in imports.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesian export growth surprised greatly to the upside in February, leaping to 14.1%…
- …But base effects did more heavy lifting; monthly momentum and commodity support are lacking.
- Indonesia’s exports aren’t seeing any US front- loading, unlike some of its neighbours; that’s good.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Blame mainly softer fuel & power deflation; headline disinflation is just around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Indonesia’s February export pop isn’t so black and white
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Rural consumption alone cannot underpin India’s recovery indefinitely; urban demand is a must…
- …Encouragingly, household balance sheets have come a long way from their 2023 low point.
- Wage growth and formal-sector hiring are finding their feet too, supporting the rise in spending plans.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Food disinflation strikes again; consumer non-durables IP stages a partial rebound.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s shockingly low February CPI was no surprise to us; now expect near-term stability in food CPI…
- …Look for the consensus to move closer to our 3.8% average CPI forecast for 2025; an April cut is a go.
- IP growth rebounded strongly in January, pointing to an early manufacturing cushion for Q1 growth.
Meekita Gupta (Asia Economost)Emerging Asia
- In one line: A not-too-damning payback from the modest front-running, pre-VAT hike.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Retail sales growth in Indonesia sank in January as the pre-VAT-hike front-loading unwound.
- The current recovery in consumer confidence—if it holds—points to 2% average sales growth in 2025…
- …Faster growth will be hard to achieve, with spending already above-average in terms of income use.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Taiwan’s export growth really accelerated in February and was almost double consensus…
- …Driven by strong growth in exports to the US, with some recovery in demand from China.
- Headline inflation eased because of Lunar New Year base effects; food and housing remain stubborn.
Meekita Gupta (Asia Economost)Emerging Asia
- In one line: Dragged down by transportation and communication base effects.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Philippine sales growth remains sturdy, but the remittance lift should soon reverse
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The low rate of Philippine unemployment has been range-bound for over a year, but red flags are rising.
- The respectable rate of sales growth could soon turn, as the PHP boost to remittances fades away.
- The February slip in Thai inflation was a base-effect story, but sub-1% prints are still around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Finally seeing signs of US front-loading in Vietnamese exports, Tet noise aside
Ignore the official slip, sales growth strengthened in February
Food inflation noesdives with the help of residual Tet noise
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Vietnam’s first trade deficit since mid-2022 was due partly to Tet noise, masking a spike in US exports…
- …Payback will eventually follow the front-loading of US demand; FDI is feeling the tariff uncertainty.
- The soft February CPI should be all the BSP needs to resume rate cuts at its next meeting in April.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Door now wide open for the BSP to resume easing in April
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
