A batch of consumer price index (CPI) results across the Asian region captured more relaxed inflation prints for June from Indonesia, South Korea, the Philippines, and Thailand, according to Moody's Analytics Asia Pacific Economic Preview.
Slowing food inflation was instrumental in the lower CPI prints in Indonesia, South Korea and Thailand, while Philippine inflation came
down despite a jump in food price pressures. In Thailand, inflation across
food and beverages eased to 0.5% year on year from 1.1% in May. Tumbling meat prices helped. The weekly preview added that Taiwan bucked the trend, recording an uptick in inflation to 2.4% year on year from 2.2% in May.
"After four straight months of accelerating inflation, a lower-than-expected CPI print from the Philippines looks to be the turning point that households have been hoping for. Headline inflation cooled to 3.7% year on year in June from 3.9% in May," Moody's Analytics said.
It added that accelerating food inflation (6.5%) accounted for over two percentage points of the headline print. By contrast, inflation
cooled across transport and another heavyweight sector—housing, water and electricity.
Last week, the Philippine Statistics Authority (PSA) reported that headline inflation eased to 3.7% in June from 3.9% the previous month due to stabilizing energy and transport costs. Inflation in June last year was higher at 5.4%.
PSA Undersecretary and National Statistician Dennis Mapa said the downtrend in overall inflation in June was primarily influenced by the slower annual increment of housing, water, electricity, gas, and other fuels, which was 0.1% from 0.9% in May.
Year-to-date headline inflation was 3.5%, well within the government's 2% to 4% target. The sharper deflation in electricity, recorded at -13.7% from -8.5% in May, significantly contributed to the slowdown. Transport inflation, likewise, decelerated to 3.1% from 3.5% due to lower inflation rates in personal transport and gasoline.
South Korean inflation hits an 11-month low
According to Moody's Analytics, the South Korean inflation rate is
the lowest since July 2023 after a third straight fall. June's 2.4% year-on-year print landed below the 2.6% that we and the consensus expected, with a significant moderation in food inflation as the leading cause.
"Core inflation was 2.2%, its lowest reading since late 2021. Inflation across the food and nonalcoholic beverages segment, which has the third largest weighting in the CPI basket, eased to 3.8% from 5.1% in May. In February, it was running at 6.9%," the report said.
Vietnam's economy grew 6.9% in Q2
Vietnam's better-than-expected second-quarter GDP came in at 6.9% year on year.
Growth over the first half was 6.4%, which puts the country on track with the government's 2024 growth target of 6% to 6.5%. The latest GDP result coincided with robust June data for industrial production, exports, manufacturing activity and retail sales, the latter enjoying a nice boost from tourist spending.
Moody's said, "The chief risk to the economy is high inflation, which is close to the central bank's target range of 4.5%. That and a relatively weak currency will deter the State Bank of Vietnam from cutting interest rates anytime soon. The central bank is more likely to tighten monetary policy."
Vietnam announced on July 1 that its June-quarter GDP rose 6.9% year over year, which means growth in the first half was 6.4%. Vietnam is comfortably in the front regarding the region's most vital economic performance.
Consumption contributed 4.4 percentage points to growth in the latest quarter.
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