DBS Economics & Strategy: This Week: Firm growth, hawkish undertonesMs. Radhika Rao, India Economist, DBS Bank
Key Highlights : -
- GDP reports from Hong Kong, Indonesia and Philippines are likely to point towards stable to slightly firmer growth in 1Q18.
- Indonesia's and Philippines' central banks are expected to sound cautious amidst financial market volatility and currency underperformance.
- China's exports are likely to recover from a rush to fulfil orders before US-imposed tariffs take effect.
India: Softer industrial production (IP) growth in March will mask the stronger sequential rise. Headline IP is likely to moderate to 5% YoY from 7.1% month before, weighed by base effects. On a MoM basis, production likely rebounded, mirroring the jump in the earlier released core industries index. In the latter, there was an improvement across segments save for crude oil; better-faring electricity, coal, steel, cement, etc. March PMI-manufacturing had eased, likely on currency underperformance and higher commodity prices, feeding into concerns over higher input prices and pressure on margins, but recovered ground in April. Auto sales continue to stay firm, supported by higher commercial vehicles and two-wheeler sales. An actual outcome close to our estimate will see IP average 4.4% growth in FY18, steady from the year before and recovering from a pre-GST slump in 1HFY18.