No cut, but the sea change in RBI policy is here
Indonesian retail sales growth recovers to a five-month high
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The RBI held its repo rate at 6.50% yesterday, but finally shifted its stance to “neutral”.
- Its still-optimistic GDP outlook implies it will be easy to justify a December cut, when Q3 growth falls flat.
- The outlook for food inflation—both short- and long-term—is improving, despite isolated shocks.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The ongoing run of positive Philippine sales growth is fragile
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Philippine sales growth stayed positive in August, but support from remittances will soon U-turn…
- …Consumer confidence remains lacklustre, and the drawdown on already-low savings is no silver bullet.
- Below-target Thai CPI continues to make the case for an imminent rate cut; rising THB risks deflation.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- GDP growth in Vietnam surged to a two-year high in Q3, at 7.4%, handily outstripping expectations…
- …The quarterly profile shows only a trivial loss of steam, despite the damage from Typhoon Yagi.
- The critical export sector is still going strong, though FDI inflows now appear to be peaking.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Base effects from late-2023 utility cuts lead modest headline uptick in Thai inflation
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Philippine inflation dived below the BSP’s range in September, almost ensuring a 25bp cut next week…
- …Persistent under-capacity in heavy industry remains a fundamentally disinflationary force.
- Positive price effects and recovering vehicle sales continue to mask a slump in Singaporean retail.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Below-target range inflation effectively guarantees another BSP cut this month
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
Export-oriented manufacturers in ASEAN hit a speed-bump at the end of Q3
Much more food disinflation ahead in Indonesia
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- ASEAN’s manufacturing PMI fell to a seven-month low in September, as bad weather hit big exporters.
- The downward surprise in Indonesia’s September CPI has more legs than the upward core surprise.
- Indian core IP growth has plunged into the red for the first time since early 2021; all eyes on the RBI.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Thai retail sales growth appears strong, in double digits, but the devil is in the details…
- …Private consumption growth—a more credible measure—remained weak and in the red in August.
- Cyclically, consumer confidence is fading and underlying job-market trends are deteriorating.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: A 3.5-year low; base effects were the main culprit, but momentum is vanishing.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Boosted—again—by volatile ‘other’ sales.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The potential lift from Thailand’s initial cash relief will still be limited by deteriorating balance sheets.
- Big-bang restart of the BSP’s RRR cuts likely to be followed by smaller but more frequent reductions.
- The post-pandemic rise in India’s LPFR, which has flattered the unemployment rate, has peaked.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: DM demand is helping to stabilise the ship.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
BI SPRINGS A SEP. SURPRISE; 50BP MORE CUTS IN Q4
- …INDIA’S GDP GROWTH SLOWDOWN IS FAR FROM OVER
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Taiwanese consumer demand remains fragile, but the weak August sales print is not representative...
- …As volatile vehicle sales growth depressed the headline; this is likely to rebound in September.
- Thai exports stayed robust in August, but leading indicators are grim and THB strength is a threat.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- India’s PMIs are down concurrently year-over-year for the first time in a while, signalling 5% growth.
- Malaysian food inflation is likely to increase, but headline disinflation overall is still on track.
- Singapore’s core inflation rise is no cause for worry; domestic services inflation momentum is slowing.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
The moderation in India’s PMIs continues, as they end Q3 on a soft note
Food disinflation pushed down Malaysian inflation in August
Singaporean headline inflation falls in August, despite a pick-up in core
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The outperformance of Indian GDP growth versus other big EMs in the post- Covid era is undeniable…
- …But putting its growth pace into its proper context remove s a lot of sheen; China’s still a bigger driver.
- “Make in India” remains a macro failure, despite the smattering of success stories at the micro level.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
