- In one line: Relax; the trade balance is stabilising.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The Bank of Thailand left its policy rate at 2.50% yesterday in another six-to-one split vote…
- …We got this one wrong, but we continue to believe that 50bp of cuts will be made by year-end.
- The MPC is finally worrying about local demand; better late than never, as exports won’t help.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Thailand’s economy lost momentum in Q2, despite a hefty—but unsustainable—bounce in exports…
- …External demand looks set to stay lacklustre into 2025, weighing further on already-weak capex.
- We remain downbeat on growth, and still see the BoT cutting rates twice before year-end.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Unsustainable export bounce saves Thai Q2 GDP; domestic demand still lethargic
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The BSP pulls the trigger… more—and potentially larger—cuts to come in Q4
Indonesia’s small trade surplus isn’t actually that bad, while the stellar y/y rates need to be put into context
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The BSP started easing policy yesterday; we now expect much larger 50bp cuts from December.
- The ousting of Thai PM Srettha will weigh further on the capex recovery and silence some MPC hawks.
- Indonesia’s July trade data were very mixed; don’t read much into the upside and downside surprises.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The July collapse in inflation in India below the key 4.0% mark, alone, won’t matter to RBI policy.
- A tepid bounce in August, however, with vegetable prices now correcting, would support calls for a cut.
- We also think that this month’s Q2 GDP will disappoint heavily; our final forecast is 6.0%
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Underlying sales momentum in Indonesia was fading heading into Q3
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The fledgling recovery in Indonesian sales growth masked a persistent loss of momentum in Q2.
- Slowing real wage growth is likely to put pressure on Malaysian retail sales until the end of the year.
- Taiwan’s electronics exports continue to recover, despite the sharp drop in export growth in July.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Base effects were behind the Philippines’ consensus-matching Q2 GDP print, nothing more.
- Consumption is now in a shallow recession, while the post-Covid catch-up in capex is still struggling.
- We have raised our forecasts, but still see GDP growth slowing to 5.4% this year and 5.2% in 2025.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Ignore the consensus-matching Q2 y/y print, Philippine consumption is in recession
The RBI keeps up the inflation-fighting talk
Malaysian fuel sales take a hit from subsidy removal
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Thai inflation will return to the target range in the next few months
Sales volumes in the Philippines suffer a second straight q/q drop
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Thai CPI surprised marginally to the upside in July, with headline rate rising to 0.8% and core to 0.5%.
- The mean-reversion up in food prices should see inflation return temporarily to target-range until Q1.
- Core inflation is likely to remain under 1%, though; the weak economy will keep this gauge anchored.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
First BSP rate cut delayed to October
The net trade story will be painful for the Philippines' upcoming Q2 GDP report
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- We now expect the BSP to wait until October to cut rates, as inflation re-breached the target in July.
- Taiwanese inflation, up slightly in July, should start to benefit from friendly base effects from August.
- Singaporean retail sales growth continued to deteriorate in June on weaker volumes.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Indonesian GDP growth barely changed in Q2, at 5.1%, despite the U-turn in election spend.
- Capex was the main cushion on a quarterly basis, but dark clouds are still building over consumption.
- The correction in food prices has run its course, but food disinflation still has plenty of room to run.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Machinery capex bump cushions the unwinding of election spending in Indonesia
Fall in discretionary spending sends Singaporean sales growth back into the red
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The output price sub-indices of India’s July PMIs spike d, but it would be premature to raise a red flag.
- Indonesia’s July CPI should see inflation falling below the 2.5% target, on further food disinflation.
- We look for a small drop in ASEAN’s July PMI, as a couple of the big exporters look overstretched.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
