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Economy flatlining in Q3, but recession unlikely

Note: We’ll be discussing the China growth/stimulus question, the BOJ’s policy outlook, Indian food price inflation and more in our monthly Asia Drop-In on Thursday, 31st August. Register here to join the online briefing.

The government announced this week that it will extend gasoline subsidies until year-end and we’re assuming that subsidies for electricity and gas will only be phased out in early-2024, too. Meanwhile, we doubt that any downward revisions to Q2 GDP growth in the second estimate due next week will be large enough to justify other analysts’ pessimism about 2023 GDP growth relative to our own forecast. And while the July activity data confirm that GDP growth slowed sharply this quarter following the bumper rise in Q2, there are no indications that output is plunging outright.

We are publishing this Weekly one day earlier than usual because the Singapore office is closed for the Presidential Election on Friday, 1st September 2023.

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