The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Thailand's manufacturing production index (MPI) rose by 1.79% in July from a year earlier, marking its first increase in three months, according to the country's industry ministry. This growth surpassed a forecasted 0.7% decline predicted by a Reuters poll, signaling a potential recovery for the sector. The rise was attributed to stronger exports, increased tourism, and higher public spending.
Key Takeaways:
Positive Turn in Factory Output: The July MPI showed a 1.79% increase, a reversal from a 1.63% decline in June, indicating a recovery in Thailand's manufacturing sector. The deputy director general of the Office of Industrial Economics, Krit Chansuwan, expressed optimism, expecting further growth in August based on higher import levels, which is a positive sign for future manufacturing and exports.
Boost from Exports and Tourism: Thailand's export sector saw a notable improvement, with a 15.2% rise in July compared to the previous year, marking the biggest increase in over two years. Imports also rose by 13.1% in the same period. Meanwhile, the tourism sector is showing strong recovery, with 23.1 million foreign visitors recorded so far this year, up 32% from the same period last year, approaching pre-pandemic levels of nearly 40 million visitors in 2019.
Annual Outlook and Forecast: Despite the recent growth, the overall factory output for the January-July period contracted by 1.48% compared to the previous year. The ministry maintained its forecast for a modest growth in manufacturing output of between 0% and 1% for the whole of 2024, reflecting cautious optimism amidst the ongoing recovery.
The rise in factory output, coupled with stronger export performance and a rebound in tourism, indicates positive momentum for Thailand's economic recovery, although challenges remain in achieving sustained growth throughout the year.
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