This article first appeared in The Edge Malaysia Weekly on April 20, 2024 - April 26, 2024
Attention this week will be on the March inflation rate, with the Department of Statistics Malaysia (DOSM) slated to put out Consumer Price Index (CPI) — the key gauge for inflation — data on Thursday.
Inflation edged up by a higher-than-expected 1.8% in February from a year earlier, compared with 1.5% in January, mainly because of water tariff adjustments and higher cost of public transport services. However, core inflation — which excludes the volatile prices of fresh food and prices administered by the government — stayed steady at 1.8% year on year (y-o-y).
“We maintain our 2024 headline inflation projection at 3.3% y-o-y. Following the adjustments in services tax and anticipated rollout of diesel subsidy rationalisation, we expect the inflation momentum to gain pace in 2Q2024,” RHB Global Economics & Market Strategy said in a report last month.
Meanwhile, on Friday, DOSM will release the March Producer Price Index (PPI) for local production, as well as export and import statistics by state.
On Monday, Bank Negara Malaysia will release its latest international reserves data as at April 15.
Over at the courts, the 1MDB-Tanore criminal trial involving former prime minister Datuk Seri Najib Razak continues from Monday to Saturday.
Singapore will put out its March inflation and industrial production data on Tuesday and Friday, respectively.
Indonesia will release its March trade data on Monday and, on Wednesday, its central bank will have an interest rate decision. A Bloomberg poll of 13 economists as at April 19 indicates that 10 expect the policy rate to stay steady at 6%, while the remaining three expect a rate hike of 25 basis points.
“We keep our forecast for the rate to remain at 6% in 2024, with rupiah stability as the key reason for keeping [it] steady. In addition, Indonesia’s steady economic growth, as well as manageable inflation are also the key factors for Bank Indonesia to delay easing interest rates till early 2025,” UOB Global Economics & Markets Research said in an April 19 outlook report.
South Korea will announce its 1Q gross domestic product (GDP) on Thursday. A Bloomberg survey sees GDP growing 2.6% y-o-y in the quarter. In the final quarter of last year, the economy grew 2.2% y-o-y, the fastest pace since 3Q2022. For the full year, the economy grew 1.4% — a slower pace compared with 2.6% in 2022 and 4.3% in 2021. The Bank of Korea has projected 2.1% growth for this year. South Korea will also release March PPI on Tuesday.
It is a relatively light week in China in terms of macroeconomic data releases. On Monday, the country will release its latest Loan Prime Rate (LPR). A Bloomberg poll of 13 economists expects the one-year and five-year rate to stay unchanged at 3.45% and 3.95% respectively. The LPR is a lending reference rate set monthly by 18 banks. Most new and outstanding loans in China are based on the one-year LPR, whereas the five-year rate influences the pricing of mortgages.
“While the one-year and five-year LPR will likely be unchanged at the April fixing, given renewed depreciation pressure on the [renminbi], we still expect the PBoC (People’s Bank of China) to moderately increase monetary policy support this year against a low inflation backdrop, in order to boost the economic recovery as downside risks remain significant,” says UOB.
“We reiterate our forecast for the one-year LPR at 3.20% by end-4Q2024 while the five-year LPR is likely to stay on hold at 3.95% through the rest of 2024.”
China will release industrial profits for March on April 27.
Japan has a monetary policy decision on April 26, and there will be updates on the central bank’s GDP and inflation forecasts. “Following the Bank of Japan’s first step towards policy normalisation in March, we expect the BoJ to embark on a long, gradual and likely limited normalisation path. We [and the markets] look for the BoJ to stay on hold at the April meeting, where the focus will likely be on the updated CPI forecasts. For now, we expect the BoJ to lift the short-term Policy Rate Balances from 0.1% to 0.25% but that increase may only come in 4Q24, subject to the CPI forecasts changes in the subsequent monetary policy meetings,” UOB says.
The US will announce its first-quarter GDP data on April 25. UOB estimates that growth will come in at 1% from 3.4% in the final quarter of last year. All eyes will also be on the stream of US corporate earnings coming out this week, including from tech giants Alphabet Inc, Microsoft Corp, Intel Corp and Meta Platforms.
The Australian and New Zealand stock markets will be closed on April 25 for Anzac Day.
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