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This page has been updated with additional analysis since first publication. Slow grind back to 4% Headline consumer price inflation held steady at 5.1% y/y in February and looking ahead, we think it will take a few more months before it reaches the RBI’s …
12th March 2024
Inflation drops, Banxico on course for rate cut this month The drop back in Mexico’s headline inflation rate to 4.4% y/y in February, alongside the weakness of the latest activity data, leaves Banxico on course to cut interest rates at its next Board …
7th March 2024
Rates on hold throughout 2024 Bank Negara Malaysia (BNM) left its overnight policy rate on hold (at 3.0%) today, and hinted in its statement that it was in little rush to change interest rates any time soon. This supports our view that the policy rate …
Export volumes hit record high China’s export values rose y/y at the fastest rate since May, with export volumes reaching a record high. We doubt the sustainability of this strength, however, since exporters now have more limited scope to reduce prices to …
We hosted a Drop-in following the announcement that can be viewed on demand here . Central Bank of Egypt shifts back towards orthodoxy The announcement minutes ago from the Central Bank of Egypt that it has devalued the pound and hiked interest rates by a …
6th March 2024
Very modest growth in Q4, but 2024 should be better South Africa’s economy posted a measly 0.1% q/q increase in GDP in the final quarter of last year and the latest evidence points to a soft start to 2024 too. But we still think that, with the drags from …
5th March 2024
Gulf non-oil sectors strengthen in Q1; Egypt’s economy knocked by Israel-Hamas spillovers February’s batch of PMIs from the Middle East and North Africa continued to show that the Gulf’s private non-oil sectors have started 2024 on a strong footing. But …
This page has been updated with additional analysis since first publication. Inflation continues to rise, tightening cycle now at risk of restarting The stronger-than-expected rise in Turkish inflation to 67.1% y/y in February adds to our concerns given …
4th March 2024
Consumer resilience comes to an end The stagnation in Brazil’s GDP in Q4 and the decline in household consumption confirmed that the economy lost momentum sharply and, while we expect a pick-up in growth in the coming quarters, we’re now more confident in …
1st March 2024
PMI bounces, but still looks like a soft start to 2024 Although South Africa’s manufacturing PMI jumped in February, the sector appears to have made a soft start to the year. We still expect growth to pick up over the rest of this year as loadshedding …
Turkey and Russia continue to show signs of resilience The manufacturing PMIs out of Central and Eastern Europe (CEE) generally ticked up last month, but still suggest that industrial sectors remained weak. In contrast, the increases in the PMIs in Turkey …
This report was first published on Friday 1 st March covering the official PMIs and Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on Tuesday 5 th March. An encouraging improvement in services activity The PMIs are …
This page has been updated with additional analysis since first publication. Exceptional economic performance suggests no imminent rate cuts The GDP data for Q4 confirm that India’s economy ended last year with a bang. Looking ahead, we expect economic …
29th February 2024
This page has been updated with additional analysis since first publication. Economy re-accelerates in Q4 The pick-up in Turkish GDP growth to 1.0% q/q in Q4 was driven by a rebound in private consumption and suggests that aggressive monetary tightening …
Economy maintains strong momentum The latest activity data for January suggest that Russia’s economy maintained solid growth at the start of this year, which supports our forecast for above-potential GDP growth of 3.0% over the course of 2024. Retail …
28th February 2024
Sentiment edges lower, but still points to recovery The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally fell in February, but still point to regional GDP growth strengthening in Q1. Economic sentiment …
New MPC delivers large rate hike After a seven-month hiatus, the Central Bank of Nigeria’s (new-look) Monetary Policy Committee stepped up to the plate and hiked interest rates by 400bp, to 22.75%, as it showed greater appetite to tackle the inflation …
27th February 2024
Step up in pace of easing will soon be reversed The decision by the Hungarian central bank (MNB) to step up the pace of its easing cycle today, with a 100bp interest rate cut, will probably be followed by further large interest rate cuts over the next few …
Further signs that underlying inflation isn’t easing The breakdown of Brazil’s February mid-month inflation reading of 4.5% y/y showed that core services inflation remained elevated. And while further 50bp cuts in the Selic rate next month (to 10.75%) and …
BoI stands pat as inflation risks remain strong Israel’s central bank opted to leave interest rates on hold at 4.50% today – in contrast to the consensus view for a cut – and the communications continued to emphasise upside inflation risks. Policymakers …
26th February 2024
Growth pick up is likely to be short-lived Nigeria’s GDP growth rebounded to 3.5% y/y in Q4 but we doubt that this strength will last. Tighter monetary policy, coming alongside the pernicious effects of further weakness in the naira and ongoing struggles …
22nd February 2024
Inflation drops back, March rate cut in play The drop back in Mexico’s headline inflation rate to 4.5% y/y in the first half of February leaves Banxico on course to begin an easing cycle at March’s Board meeting. That said, the rise in core services …
New governor committed to the tight policy stance The hawkish statement accompanying the Turkish central bank’s decision to leave interest rates unchanged at 45.00% today supports our view that a shift to monetary easing remains some way off and we still …
Domestic demand to drive the recovery Poland’s activity data for January suggest that the reacceleration in wage growth at the start of this year supported domestic demand, while the export-orientated industrial sector struggled. We think that a further …
This page has been updated with additional analysis since first publication. Manufacturing and services activity likely to remain robust The flash composite PMI reading for February suggests that the economy continues to perform exceptionally well. …
Rise in core inflation will give cause for concern to the SARB South Africa’s headline inflation rate picked up to 5.3% y/y in January and the rise in core inflation is likely to spook an already-hawkish SARB, possibly pushing the start of an easing cycle …
21st February 2024
This page has been updated with additional analysis since first publication . PBOC eschews broad-based cuts, steps up property support Today’s 25bp cut to the 5-year LPR is clearly aimed at supporting the housing market. On its own it will not revive new …
20th February 2024
Deep contraction highlights the extent of the conflict damage The 19.4% q/q annualised contraction in Israeli GDP in Q4 was much worse than had been expected and highlights the extent of the hit from the Hamas attacks and the war in Gaza. While a recovery …
19th February 2024
Tightening cycle comes to a close, but rates to stay high Russia’s central bank (CBR) left its policy rate on hold at 16.00% as expected today and we think that inflation pressures will prevent it from cutting interest rates for most of this year. Today’s …
16th February 2024
Weak end to 2023 The stagnation in Colombia’s GDP in Q4 confirmed that the economy remained very weak at the end of last year and we think the recovery this year will be slower than most anticipate. At the margin, the weakness of the latest activity …
15th February 2024
Inflation at near-30%, all eyes on CBN Nigeria’s headline inflation rate rose further to 29.9% y/y in January and the latest sharp fall in the naira means that it is likely to reach close to 35% y/y over the coming months. We expect the central bank to …
Plunge in inflation seals the deal on a larger rate cut We’d expected a large fall in Czech inflation in January, but the collapse from 6.9% y/y in December to just 2.3% y/y shows that price pressures are dissipating even more quickly than we’d …
This webpage has been updated with additional analaysis, as well as a chart and table of key data. Inflation to remain low this year and next Saudi Arabia’s headline inflation rate edged up from a two-year low of 1.5% y/y in December to 1.6% y/y in …
Inflation pressures unlikely to prompt another hike The stabilisation in Russian inflation in January, at 7.4% y/y, should provide cover for the central bank to leave its policy rate unchanged at 16.00% at its meeting on Friday, rather than continue the …
14th February 2024
At a standstill at the end of 2023 Q4 GDP figures out of Central and Eastern Europe (CEE) showed that the region ended last year on a weak note, but the outlook for 2024 looks brighter. While soft external demand is likely to remain a drag on growth over …
Above-target inflation to keep NBR in a hawkish mood The National Bank of Romania (NBR) left its policy rate on hold at 7.00% again today and, while interest rate cuts are likely to start around mid-year, we think that monetary easing will be less …
13th February 2024
This page has been updated with additional analysis since first publication. In the context of its continued hawkish communications, we doubt that the drop in headline consumer price inflation in January will be enough to convince the RBI to pivot yet. …
12th February 2024
Weakness underlying headline strength There was the usual seasonal surge in net credit in China in January that took new bank lending to a record high. The underlying story is less positive, with loan demand little changed and broader credit growth slower …
9th February 2024
Rates on hold, Banxico to stay cautious even once easing cycle begins Mexico’s central bank left interest rates unchanged at 11.25% again today but the accompanying statement further opened the door to the start of an easing cycle, probably at the next …
8th February 2024
Mexican inflation drops, but Banxico to hold firm later today The jump in Mexico’s headline inflation rate to 4.9% in January means Banxico won’t feel comfortable enough yet to start an easing cycle at the Board meeting later today. Elsewhere, the further …
Inflation continues to slow, but looming devaluation will keep it high Egypt’s headline inflation rate slowed for a fourth consecutive month, easing from 33.6% y/y in December to 29.9% y/y in January. We think inflation will continue to slow this year, …
Governor Karahan committed to tight policy, rate cuts some way off The communications from new Turkish central bank governor Karahan at today’s Inflation Report briefing will have helped to reassure investors that the change at the helm of the central …
RBI not ready to pivot yet The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone. With the economy holding up well and inflation to remain above the 4% target for a few more months yet, we doubt the central …
This page has been updated with additional analysis since first publication . Inflation set to rebound gradually but remain low CPI fell deeper into deflationary territory last month. But this was largely due to the usual volatility in food and tourism …
Economy rebounds strongly following war and sanctions shock Russia’s economy expanded by 3.6% over 2023 as a whole, marking a sharp rebound from a contraction of just 1.2% in 2022 (revised from 2.1%). The activity data for December suggest that the …
7th February 2024
Rates on hold, March rate cut is in the balance The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we think that an interest rate cut at the next meeting in March looks finely balanced. Our current assumption is that …
Surprise hike, tightening cycle may not be finished yet The Central Bank of Kenya delivered a surprise 50bp interest rate hike today, to 13.0%, suggesting that the MPC’s inflation fears are outweighing signs that exchange rate pressures are easing. With …
6th February 2024
Headline inflation picks up, all eyes on new governor Headline inflation edged up slightly in Turkey to 64.9% y/y in January, and the m/m figure – a 6.7% increase on the back of a large minimum wage hike – looked even worse. The figures highlight the …
5th February 2024
South Africa makes a poor start to 2024 South Africa’s manufacturing PMI recorded a sharp drop in January as logistics problems and weak demand weighed on activity. We still expect growth to pick up over the course of this year, but this latest data …
1st February 2024
CEE industry still struggling, input prices diverge in Turkey and Russia The manufacturing PMIs out of Central and Eastern Europe (CEE) for January remained soft and haven’t changed the broad picture that the region’s industrial sectors continue to …
