Consumer price inflation in Indonesia eased to 3.0% year-on-year (y-o-y) in December from 3.6% y-o-y in November, primarily due to slower annual increases in food prices. The Philippines

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News Highlights - Week of 2 - 6 January 2017

Consumer price inflation in Indonesia eased to 3.0% year-on-year (y-o-y) in December from 3.6% y-o-y in November, primarily due to slower annual increases in food prices. The Philippines’ consumer price inflation climbed to its highest level in 2 years in December at 2.6% y-o-y, up from 2.5% y-o-y in November on increased demand during the holiday season. Inflation in the Philippines averaged 1.8% y-o-y in 2016. In Thailand, inflation rose to 1.1% y-o-y in December from 0.6% y-o-y in November, bringing annual average headline inflation for 2016 to 0.2% y-o-y. Food and nonalcoholic beverages remained the main driver of inflation, while vehicles and vehicle operation costs also contributed given higher oil prices.

*     Advance estimates show that Singapore’s gross domestic product (GDP) growth rose to 1.8% y-o-y in the fourth quarter of 2016 from 1.2% y-o-y in the previous quarter, driven by higher growth in the manufacturing sector. On a quarter-on-quarter and seasonally adjusted annualized basis, GDP expanded 9.1% in the fourth quarter of 2016, reversing the 1.9% dip in third quarter of 2016. Singapore’s manufacturing Purchasing Managers Index maintained an above-50 reading for the fourth consecutive month at 50.6 in December, up from 50.2 in November.

*     The Republic of Korea’s current account surplus widened to USD9.0 billion in November from USD8.7 billion in October, primarily due to the rise in the goods account surplus. Malaysia’s exports increased 7.8% y-o-y in November to MYR72.8 billion, reversing an 8.6% y-o-y decline in October. Imports increased 11.2% y-o-y in November to MYR63.8 billion, also reversing a decline of 6.6% y-o-y in October. Malaysia had a MYR9.0 billion trade surplus in November, down from MYR9.8 billion in the previous month.

*     Foreign reserves in Malaysia fell to USD94.6 billion at the end of December from USD96.4 billion at the end of November. The end-December level was also lower than the USD95.3 billion registered at the end of December 2015. According to Bank Negara Malaysia, foreign reserves are supported by foreign direct investment inflows and the current account surplus, and are offset by foreign portfolio outflows and direct investment abroad by Malaysian companies.

*     Hong Kong, China’s retail sales decreased 5.5% y-o-y in November after declining 2.9% y-o-y in October. Total retail sales in January–November 2016 were down 8.6% y-o-y to HKD394.2 billion compared with HKD431.5 billion for the same period in 2015.

*     Upcoming data releases this week include consumer price inflation data for the People’s Republic of China; trade data for the People’s Republic of China, Japan, and the Philippines; current account data for Japan; and overseas remittance data for the Philippines. In addition, a monetary policy meeting will be held by the Bank of Korea.

*     Local currency government bond yields fell for most tenors in Indonesia, Malaysia, Philippines, Thailand, and Viet Nam. On the other hand, yield movements in the People’s Republic of China, Hong Kong, China, the Republic of Korea, and Singapore are mixed. Yield spreads between the 2-year and 10-year tenors widened in all markets except for Hong Kong, China, Malaysia, Thailand, and Viet Nam.

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