GDP growth in Vietnam held firm at 8.2% y/y in Q3, underpinned by resilient exports despite the 20% US tariffs introduced in August. The strength of the export sector likely reflects increased re-routing of Chinese goods and Vietnam’s growing status as a manufacturing alternative to China. It also helps that electronic shipments to the US are still tariff-free. However, the export surge is leading to a widening in Vietnam’s trade surplus with the US, which could invite renewed scrutiny from Washington.
The Bank of Thailand surprised markets by leaving rates unchanged at its scheduled meeting this week and playing down deflation risks, even as both headline and core inflation remain below target. Subdued domestic demand suggests price pressures will stay weak – and a negative shock could push the economy into deflation.
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