April 29, 2024 05:37 GMT
March Asian Inflation Moderates
ASIA
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Most Asian countries saw a moderation in inflation in March with China posting one of the largest. Non-Japan Asian headline moderated to 1.7% from 2.1% with core at 1.0% from 1.5% but excluding China the regional moderation was more muted and inflation more elevated at 3.6% down 0.1pp and 2.0% down 0.2pp as food and fuel prices remain problematic. While headline remains high, core is contained and unlikely to worry most central banks with the focus in the region on currency weakness.
Non-Japan Asia ex China CPI y/y%
Source: MNI - Market News/Refinitiv/IMF
- The Philippines recorded the highest inflation rate of the countries in our aggregate at 3.7% for headline (up from 3.4%) and 3.4% for core (down from 3.6%) but they are well off their 2023 peaks of 8.7% and 8% respectively. April CPI prints on May 7 and may exceed BSP’s 2-4% band as rice and transport price pressures persist. There are also upcoming wage increases.
- Thailand’s inflation is one of the lowest in the region, lower than China’s, but as the Bank of Thailand points out it reflects government subsidies and price caps rather than weak domestic price pressures. Headline inflation improved to 0.5% in March from -0.8% while core was steady at 0.4%. BoT expects 0.6% and 0.6% respectively in 2024, and 1.3% and 0.9% in 2025. April prints on May 7.
- Even though headline and core inflation are within Bank Indonesia’s 1.5-3.5% band, it hiked rates at its April 24 meeting. The decision was made to ensure FX stability and limit the pass through to inflation after IDR weakened substantially but the 25bp rate rise has done little to strengthen the rupiah with USDIDR trading higher since the meeting and is currently around 16244 +0.6% since the hike.
ASEAN core CPI y/y%
Source: MNI - Market News/Refinitiv
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