April 27, 2023 1:06 PM UTC

Mexico:
Figure 1: Mexico Exports and Imports (12 months sum, USD Bn)
Source: INEGI
Mexico’s main trading partner is the United States, which corresponds to 80% of their exports values. Additionally, Mexico is a relatively open economy as trade corresponds to around 40% of Mexican GDP. The main story

China’s 25bps RRR cut

March 17, 2023 9:58 AM UTC

Figure 1: China Core and Headline CPI (Yr/Yr)
Source: Datastream 
The PBOC 25bps cut in RRR is a surprise more in timing rather than size and concept, as no major rumours had been evident. For domestic reasons, the RRR will be helpful in reinforcing the economic recovery that is the central focus of

China’s Local Government Debt: Problem or Crisis?

March 10, 2023 8:01 AM UTC

China’s local government and local government financing vehicles (LGFVs) are facing challenges, but how big could the problem become? 
Market Implications: We do not see a Lehman style moment in either the LGFV, SOE or property developer’s debts, as China authorities have huge moral suasion in e

China 5% growth target for 2023 and 2024/25?

March 6, 2023 10:50 AM UTC

The departing prime minister has unveiled a GDP growth target of around 5% for 2023 against market expectations of just above 5%. One reason for the cautious growth target is that the authorities do not want to overstimulate China’s economy. A 5.5% target would require additional policy stimulus a

China PMI Rebound and More State Intervention

March 1, 2023 8:11 AM UTC

Figure 1: China Manufacturing and Non-Manufacturing PMI (Index Level)
Source: Datastream/Continuum Economics 
China NBS manufacturing rose to 52.6 from 50.1 in January, as the lifting of zero COVID policies helped business to operate more normally – Caixan manufacturing also rose to 51.6 from 49.2.

Emerging Asia Faces Crosswinds

February 27, 2023 9:31 AM UTC

Indonesia: Lowest Trade Surplus Since May 2022
Indonesia’s trade surplus came in lower than market expectations as it dipped to $3.9bn in December 2022, from $5.1bn in November. The overall trade balance for Indonesia was at a record high of $54bn in 2022, on account of higher commodity prices duri

U.S./China Geopolitical Tensions, but Ukraine the Real Focus

February 15, 2023 1:59 PM UTC

With the U.S. shooting down a balloon and three unidentified objects in the last week, U.S./China tensions have risen. What will happen and will geopolitics be an issue once again for 2023?
Figure 1: Taiwan Scenarios 
Source: Continuum Economics 
U.S. Sensitivity over Balloons 
A media and political

China Tax Take Restrains Fiscal Policy

February 14, 2023 7:38 AM UTC

China cyclical picture looks good in 2023 and 2024 and we recently revised up our forecasts (here), but structural headwinds (slower labor force growth and sluggish productivity growth) will then slow the economy. Can fiscal policy support growth on a structural basis?
Figure 1: General Government Re

China Inflation under Control

February 10, 2023 1:39 PM UTC

Figure 1: China CPI and PPI (change over year ago %)
Source: Continuum Economics
China Inflation Ticks Up, But
The January China CPI inflation at 2.1% came in line with expectations and rose from the 1.8% figure seen in December. The breakdown of the data shows that core inflation rotated higher also t

China: Growth Forecast Revised Upwards

February 8, 2023 7:24 AM UTC

Figure 1: Real GDP (change over year ago %)
Source: Continuum Economics
China Adapts Quicker to Post COVID World 
A number of positive developments have prompted Continuum Economics to revise up its 2023 and 2024 GDP forecasts for China.
Figure 2: Non-Manufacturing PMI 
Source: Datastream/Continuum Eco

India FY 2024 Budget Preview: Walking a Tight-rope

January 31, 2023 2:49 PM UTC

Figure 1: India’s Fiscal Balance and Deficit 
Source: Continuum Economics
Fiscal Consolidation Gains Unlikely 
The expected loss of growth momentum, in the wake of the Russia-Ukraine war and monetary tightening, alongside risks a protracted and deep global recession, is likely to be at the forefron

Webinar: China Equities Outperform India for 2023

January 24, 2023 9:53 AM UTC

Bottom Line: We now feel that China equities can outperform the U.S. (CSI 300 v S&P500) by 10-15% this year, rather than 5-10% we identified in the December outlook. The reopening is going quickly and with less major disruption than we thought, which can start to benefit real sector data in Q1 and p

China Equities Outperform India for 2023

January 19, 2023 7:35 AM UTC

China equity market has started the year with a healthy performance, as the shift away from zero COVID is producing hopes of an economic rebound.This has helped EM Asia equities, though Indian equities have lagged behind.
Figure 1: China Equities Starting to Rebound (Jan 1 2018 = 100) 
Source: Datast

China Q4 Better Than Expected, But

January 17, 2023 9:57 AM UTC

Figure 1: 12mth Average of Nominal Retail Sales Growth for Consumer Goods (Yuan Blns) 
Source: Continuum Economics
The Q4 GDP data and December monthly numbers were better than consensus medians with a much better than expected retail sales figure helping (-1.8% v -9.0% expected). The retail sales f

U.S./China Strategic Competition

January 12, 2023 8:54 AM UTC

Figure 1: U.S. Exports and Imports with China (USD Blns 12mth moving average)
Source: Datastream/Continuum Economics 
Warm Diplomacy After Biden/Xi Meeting, But 
The November meeting between President Biden and Xi at the G20 meeting has helped to thaw relations between the U.S. and China. Meanwhile,

COVID Mutations, Bird Flu and Other Tail Risks

January 10, 2023 8:04 AM UTC

Caution in the scientific community over the surge in COVID in China still remains (here), given that Delta COVID emerged in India in 2020 in similar circumstance of an undervaccincated population and widespread infections. However, though data from China is not accurate, most scientists note that t

China: Softening the Property Squeeze

January 9, 2023 8:28 AM UTC

 Figure 1: Percentage of Respondents that Believe Prices will Rise in Next Quarter (%)
Source: Datastream/Continuum Economics 
Loosening The Property Grip
Reports suggest that China’s authorities will allow some flexibility for certain property developers for the three red lines policy, which could