每周经济评论

Market volatility and threats to the economy add to central banks’cautiousness; China’s spending and housing indicators remain weak US China Japan China’s consumption is edging up but remains weak.Home sales continue to decline.In July, retail sales grew2.7% YoY and0.4% MoM, up fromJune’s14-monthlowsof2%YoY and-0.1%MoM,respectively.Sales ofautomobilesand electrical appliances slowed from-6.2% YoY in June to-4.9% in July and-7.6% to-2.4%,respectively. However, the decline in new home salesbythe top 100 developers worsened from-17%to-19.7%.Meanwhile,the average price of new andexisting homes in70 cities continued to decline, from-4.9% to-5.3% and from-7.9% to-8.2%, respectively. Turbulence in financial markets and the unwinding ofthe yen carry trade may affect the BOJ’s plans for raterises the rest of this year.In 2Q24,Japan's economygrew more than the market's expectation at0.8% QoQand3.1% YoY, following contractions of-0.6% and-2.3%in Q1, respectively. This aligns with the BOJ's forecastthat private spending will help stimulate the economy,potentially leading to further rate hikes in the future. TheUS economy is signaling a slowdown,but arecessionis not expected this year.In July,housingstarts dropped by6.8% MoM to 1.23 million units, andbuildingpermits fell by 4%MoM to 1.39 million units.Bothfigures were lower than analysts’expectations.Additionally, the headline inflation slowed to +2.9% YoY,thelowest since March 2021,while the core inflationeased to3.2%, the lowest since April2021. Hopes that recovery will extendthrough 2H24 havebeen boosted by the pick-up in growth momentum in2Q24, improving private consumption amid wage hikesand slowing inflation, and the recovery of the servicesector,particularly tourism.However,growthisexpectedto remain low due to weaknesses inmanufacturing and exports, which may face escalatingtrade tensions. Krungsri Research estimates that duetofinancial market volatility and economic riskconcerns,the BOJ may refrain from raising interestrates hastily, with the interest rates expected to benot exceeding0.50% by the end of2024. Additionally,theresignation of Prime Minister Fumio Kishida hasincreased political uncertainty, creating challenges forthe BOJ in ending its accommodative monetary policy. Despitestrong signs of a slowdown,there are nodefinitive signs of a recession in2H24. Positive factorsincludegrowth of retail sales,a rise in non-farmpayrolls,expansion in the service PMI,elevatedhousing prices, and an expected2.9% QoQ annualizedgrowthin3Q24GDP.Furthermore,consumerconfidence in August rose to67.8, above the marketexpectationof66.9,withconsumersexpectinginflation to remain at2.9% next year, unchanged fromJuly.Additionally,the upcoming USpresidentialelectionlater this year will be a key factor indetermining the economic direction for2025. KrungsriResearch maintains view that the Fed is likely to cutthe benchmark rates by a total of75bps this year,25bps each, to4.50-4.75% by the end of2024. Private consumption in3Q24 would likely see a slowrecovery and limited growth due to weakconsumersentiment (30.3% below pre-COVID levels in June) andcontinuingwealth declines,with no clear signs ofrecovery, especially in the property sector. A survey in2Q24also found that 61.5% of respondents preferredmoresavings,whileonly13.3%favoredmoreinvestments. However, the extension of subsidies forautosand electrical appliances purchases in July,totaling USD41.5bn might help boost consumption. Weexpect the government might stimulate home sales in2H24by further relaxing housing purchase regulationsorlowering down payment ratios,which could helpease developers’liquidity problem, reduce the risk ofdefaults, and slightly improve consumer confidence. 2Q24 Thai GDP grew by 2.3% YoY and 0.8% QoQ sa.Exportsimproved but private consumption sloweddown and investment contracted.The NESDC reportedthatthe Thai economy in 2Q24 grew by2.3%YoY(comparedto the expectations by consensus at 2.1%andandby Krungsri Research at1.9%). This is improvedfrom1.6% YoY in 1Q24. The main reason of improvingyear-on-year growth came from (i) a modest rebound ingoods exports and an expansion of services exports;(ii) a further expansion of private consumption despite aslowdown; and (iii) the return to growth in governmentconsumption for the first time in two years. However,private investment and public investment contracted in2Q24. Recently, the NESDC maintained its GDP growthforecast this year at2.5% median. The range forecasthas been narrowed to the range of2.3-2.8% from 2.0-3.0% in the previous forecast. Fearsover a political vacuum have subsidedfollowing the rapid appointment of a new primeministerbutthedirectionofthenewgovernment’s economic policy will be closelymonitored.Last week,the Constitutional Courtagreed5-to-4that Prime Minister SretthaThavisinwas guilty of a clear gross violation of ethics andhencehe and the cabinet have been dismissedfrom office with effect from14 August. However,on16August, the House of Rep