- In one line: Easing back on; three more cuts to go, from our vantage point.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The BSP restarted its easing cycle this month with a 25bp cut, to 5.50%, after February’s shock pause…
- …The Board is no longer behind the curve on CPI, as it slashed its 2025 forecast to 2.3%, from 3.5%.
- We’re maintaining our 2.5% CPI call, for now, and still see 75bp more in rate cuts by year-end.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Expect at least two more consecutive 25bp cuts from the RBI
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The RBI voted unanimously for a second 25bp rate cut and a shift in stance to “accommodative”.
- Its softer CPI forecasts now see below-target inflation persisting until the end of this year…
- …Opening the door to at least two more cuts—our baseline—more than the consensus for just one.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Short-lived, policy-induced deflation in Indonesia is over
How high can Philippine sales go before they hit a ceiling?
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesian CPI returned to the black in March, as the power discounts expired; food will soon U-turn.
- The Philippines’ sales index continues to surge, but a number of consumer sectors are still struggling.
- Food inflation in Taiwan continues to rise, though some of this is exaggerated by base effects.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Seasonally adjusting Vietnam’s quirky GDP data shows that growth improved further in Q1, to 7.3%…
- …But a sharp fall by year-end to sub-5%—at least— looks inevitable, as US tariffs hit exports and capex.
- Outright deflation in Thailand seems set to take hold, again, bolstering our call for an April BoT cut.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
A brief spell of policy-induced deflation is around the corner in Thailand
Very soft, but March should be the low for Philippine inflation this year
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The US ‘Liberation Day’ tariffs have led to cuts of 0.1-to-0.7pp to several of our 2025 GDP forecasts…
- …Vietnam’s outperformance has shrunk materially; India won’t enjoy as much of an import-drop offset.
- We now see the SBV restarting cuts to the tune of 50bp, and have added a fourth cut to our RBI view.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The nascent improvement in ASEAN manufacturing is far from comprehensive
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The manufacturing PMIs for India and ASEAN have regained momentum recently; Taiwan is wobbling…
- …But the pick-up within ASEAN is skewed; expect domestic demand’s outperformance to continue.
- Regional export volumes are hovering above trend, implying they could stomach a big hit from tariffs.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Core production growth in India fell to a five-month low in February, due partly to residual seasonality.
- The plunge in refined petroleum products output growth is real though, with more softness likely.
- The bright spots—steel and cement—should soon feel the pinch of a waning public infra drive.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Blame mainly an unsurprising reversal of the January jump in petroleum products.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Retail sales growth in Thailand sank to -1% in January, but volatile ‘other’ sales are to blame.
- The nascent post-stimulus recovery in confidence is wobbling, and could be hit further by the quake…
- …Fundamentally, though, labour productivity is improving, boding well for future wage growth.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: First red ink since mid-2023, as the inexplicable lift from ‘other’ sales continues to unwind.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Philippine trade takes a breather after a fast start to 2025
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Don’t pay too much heed to the panic over the IDR; the current account fundamentals are sound…
- …Plus, the bad fiscal start could just be a blip and foreign investor s are steadily returning to the fray.
- The big misses in Philippine trade data for February, particularly in imports, aren’t as bad as they seem.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
INDIAN CONSUMPTION ON THE MEND, SLOWLY
- …US TARIFF FRONT-RUNNING SURFACES IN FEB. TRADE DATA
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Taiwan’s central bank held rates at 2.000%; entirely expected as inflation remains elevated.
- Retail sales fell in February, as we expected, due to the changing timing of Lunar New Year...
- ...Seasonally adjusted numbers show growth, but much of this is boosted by inflation.
Meekita Gupta (Asia Economost)Emerging Asia
- India’s flash PMIs for March were mixed, but the key service sector is still seeing falling momentum…
- …Altogether, the PMIs point to GDP growth slowing to mid-4% in Q1; we’re happy to stay downbeat.
- Thai exports continue to defy gravity, and US pre-tariff front-loading is only part of the picture.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
