经济月报（2023年8月）

MONTHLYECONOMICBULLETIN August2023 Global: Rate hike cycle will end soon; restrictive policies will continue to dampen growth China Growth of business activity has decelerated to closeto lows seen during early stage of reopening.Waning post-pandemic demand, slowing externaldemand, property slump and limited policy spacethreaten future growth. EuropeCombination of high interest rates and rising living costs suggest lingering riskof a recession, but the ECB hassignaled interest rates would peaksoon. US Japan Fed hiked rates to a 22-year high, asexpected, leaving door open for apause.Data-dependent approach suggeststhis rate-hike cycle could end soon. Despite the surprise move by theBOJ to adjust the YCC, aslowdown in inflation andeconomic activity will convincethe Bank to refrain from furtherpolicy tightening. Despite lower risk of recession, global growth would remain weak by historical standardswith slowing growth in advanced economies and China GlobalgrowthisweakestsinceFebruary,withafurthercontractioninmanufacturingactivityandslowergrowthintheservicessector;Rate-hikeexpectationislowestin2years Global PMI Predicted change in interest ratesin the next 6 months, % of respondents In July, there was a noticeable slowdown in the services sector, which had been amajor driver of economic growth worldwide. Services PMI data has dropped to a5-month low in the US,6-month low in Eurozone, and4-month low in Japan.Global Manufacturing PMI fell below50-level for the11th consecutive month,reflecting a further contraction in manufacturing activity. The smallest share of respondents in two years believe interest rates willcontinue to rise in their respective countries, according to McKinsey’s survey.For the first time since June2021, less than half of respondents believeinterest rates will rise in the coming months in their home countries. HeadlineinflationissofteninginkeycountrieswithdeflationconcernsinChina;coreinflationremainshighinadvancedcountries,suggestingtheirstill-restrictivepoliciestocontinue US:Fed has hiked rates to a22-year high, as expected, leaving door open for a pause;data-dependent approach suggests the current rate-hike cycle would end soon KrungsriResearch’sview TheUSFedhasraisedratesby25bpstoa22-yearhighof5.25-5.50%.Butatthesametime,theFedhaschangeditsoutlookfroma‘likelyrecession’toa‘noticeableslowdown’.TheFedisadoptingadata-dependentapproachforfutureratedecision.Thisislikelytobethelasthikeinthecurrentcycle,forthefollowingreasons:I.Signsofeasinggrowthmomentum:In2Q23,growthinconsumerspending--68%shareofeconomicactivity–deceleratedto+1.6%from+4.2%in1Q23,withlesscontributiontoGDPgrowth(+1.1%vs+2.8%).Consumerspendingcouldsufferfromhigherborrowingcostsanddepletioninexcesssavings(builtupduringpandemic-aidprogram).JulyCompositePMI,whichtracksmanufacturingandservicessectors,isatitsweakestsinceFebruary.LeadingEconomicIndex(LEI)forJunedroppedtothelowestreadingsinceJuly2020andfellforthe15thstraightmonth,thelongeststreaksince2009.II.Unusuallytightcreditstandards:TighteningindicatorforbusinessC&Iloanshitanewcyclicalhighwithasignificantnewpercentagestilltighteninglendingstandardsforcreditcards,autoloansandothertypeofconsumerloans.III.(iii)Dissipatinginflationarypressure:Coreconsumerpriceindexrose0.2%MoMinJuly,markingthesmallestriseinmorethan2yearsforasecondstraightmonth.Coreinflationsoftenedto4.7%YoY,theslowestsinceOctober2021.ThatsuggestscurrentFedFundsrateat5.25-5.50%isrestrictive.Withinflationstillabovethe2%target,weexpectpolicyratestoremainelevatedbutunchangedthroughtomid-2024,tokeepinflationincheck. Eurozone:Combination of high interest rates and rising living costs suggest lingeringrecession risk, but ECB has signaled interest rates would peak soon KrungsriResearch’sview TheEurozoneeconomysurprisinglydodgedarecessioninQ2thankstosurprisegrowthinFrance(+0.5%QoQ)andIreland(+3.3%QoQ).However,bothdataweredistortedbyone-offfactorsthatgavetheimpressionofeconomicstrength:(i)deliveryofacruiseshipwhichaccountedfornearlyallcontributiontoFrance’sQ2GDPgrowth,(ii)volatiledatainIreland.Excludingthese,EurozoneGDPgrowthwouldbelessthan0.1%.Germanywastheworst-performeramongmajoreurozoneeconomies,stagnatingatzerogrowthinQ2,draggedbyweakpurchasingpower,higherinterestrates,andlowfactoryorderbooks. Thereisstillriskofarecessioninthesecondhalfofthisyear.EurozonePMIdataforJulyrevealbusinessactivityhadcontractedthemostsinceNovemberlastyear.Meanwhile,higherinterestrateswillcontinuetotightenfinancialconditions,whichwouldleadtoweakereconomicactivityahead,reflectedby:(i)slowdowninmoneyliquidityandlendinggrowth,(ii)thirdstraightmonthofdeclineinZEWEconomicSentimentIndex,(iii)slowerhousingmarketactivity,and(iv)retailsalesfallingfortheninthconsecutivemonth.Nevertheless,normalizedenergycostsandtightlabourmarketconditionsareexpectedtomitigatethedownsiderisks.SlowerinflationinJulysuggeststheenergycrisisinEuropeiseasingbutalsoindicatesdomesticdemandcouldweakengivenbroader-basestallingofeconomicactivities.Core