经济月报（2023年1月）

Global: China reopening could be a game changer or create greater uncertainty China A shift in its Covid policy would brighten economicprospects, led by a rebound in private consumption.However, the pace of recovery could remain fragilegiven still-weak property market, slowing exports,uncertainty over the pandemic effects, and thestrength of its healthcare system. EuropeThe effects of an extended energy crisis and monetary policy tighteningwill drag the euro-zone economy into arecession in 2023But recession could be milder thanexpected as hard data is surprisinglyresilient. US Japan Tight labor market might allow theFed to raise rates.But risk of recession and signs ofslowing price pressure suggest theFed to scale back rate hikes. Downside risk has risen alongwith slower export growth but arecession remains unlikely.The surprise widening of theBOJ's Yield Curve ceiling hasfueled speculation of the end ofultra-low interest rates. Globalactivityindicesshowsignsofrecession;China’sreopeningmayhavelimitedimpactonglobalgrowthandinflationgivenmodestsavingsrateandeasingsupplydisruption ThereisroomforinternationaltouristarrivalstoimproveinAsiaPacificregionbecauseithadbeenweakerthaninotherregionsforalmostthreeyears US:TightlabormarketmightallowtheFedtoraiseratesbutriskofrecessionandsignsofslowingpricepressuresuggesttheFedtoscalebackratehikes KrungsriResearch’sview ThetightlabormarketmightallowtheFedtomaintainarestrictivemonetarypolicythisyear.BothADPEmploymentChangeandgrowthinnon-farmpayrollsinDecemberbeatanalysts’expectationsat235,000and223,000,respectively.Unemploymentratealsofelltoa5-decadelowof3.5%inDecember. However,afterdeliveringfour75-bpratehikesanda50-bphiketo15-yearhighratesin2022,theFOMCmightscalebackratehikesforthesereasons:(i)Labormarketwouldweakenintheperiodaheadwithadeclineinaveragehoursworked,anincreaseinpart-timejobs,andadropinfull-timejobs,implyinglowerincomeahead.(ii)Therearemoresignsofweakergrowthorarecession:DecemberISMManufacturingdatacontractedforthesecondmonthinarowandISMServicesdatacontractedforthefirsttimeinover2years.Novemberimportsslid6.4%andpersonalsavingsratehasdroppedtoalmostthelowestsinceJuly2005at2.4%.(iii)Pricepressureiseasing.ConsumerPriceIndex(CPI)fell0.1%MoMinDecember,thefirstdropinover2-1/2years,androseby6.5%YoY,thesmallestrisesinceOctober2021.PCEandcorePCEInflationalsoeasedinNovember.Year-aheadinflationexpectationspreliminarydroppedtonearly2-yearlowof4.0%inJanuaryfrom4.4%inDecember.Wagegrowthhasbeenslowingwithaweakergaininaveragehourlyearnings.Risinginventorieshelpedtosoftenpricepressure.Inourview,theFedFundsratemightbeincreasedby25bpeachatthenexttwomeetingstonear5%byend-1Q23.WhilethehighratesandfurtherimplementationofQuantitativeTightening(QT)areexpectedtoeaseinflation,theslowerpaceofratehikesshouldhelptopreventthehardlanding. Europe:Recessionmaybemilderthanexpectedasharddataissurprisinglyresilient KrungsriResearch’sview Theeffectsofanextendedenergycrisisandmonetarypolicytighteningwilldragtheeuro-zoneeconomyintoarecessionin2023,givenuncertaintyoverdiplomaticconflictswithRussia.However,therearemoresignssuggestingthedownturnmightbelessseverethananticipated.PMIdatahadimprovedinlate4Q22givenlighterbusinessandconsumersentiment,softerenergyprices,awarmwinterinEurope,stronglabormarketconditions,andongoinggovernmentsupportforhouseholdsandindustry;thesecouldhelppreventasevererecessionineuro-zone. Headlineinflationisexpectedtodropfurtherthisyear(forecast5.5%in2023vs.8.4%in2022),mainlyduetosofterenergypricesandhigh-baseeffect.However,thereislingeringriskthatinflationwouldremainhighin2023,given:(i)AmericawillbemorehesitanttotaponitsStrategicPetroleumReserve(SPR)whichhasdepletedsharplysincetheRussianinvasionofUkraineinearly2022;(ii)recoveryinChineseoildemandpost-COVIDreopening;and(iii)moredemandfromEuropeinacompetitivemarkettorefillitsgasreserveforthenextwinter.Coreinflationwouldalsoremainhigher(forecast5.0%in2023vs.4.0%in2022)duetorisingpriceofservicesandtightlabormarketconditionsintheeuro-zoneeconomy(shortageofworkers)whichwillmakefirmsreluctanttolay-offemployeesdespiteriskofarecessionaroundthecorner.Thissuggestswageswouldincreasetomakeupforadropinrealincome,andthiscouldpromptauthoritiestokeepinterestrateshightofightinflation.Torestorepricestability,theECBisexpectedtocontinuetoraisepolicyinterestthisyear,possiblywithquantitativetightening(QT)inthemiddleoftheyear,tobringdowninflation.Thetrade-offwouldbeweakereconomicgrowth.Againstthisbackdrop,weexpecttheECB’sdepositratetoriseto3.00%inthefirsthalfof2023andstayatthatleveltherestoftheyear. China:AshiftinCovidpolicywouldbrighteneconomicprospectsledbyareboundinprivateconsumption,buttherearestillrisks KrungsriResearch’sview Afterunprecedentedmassprotestsinmajorcities,ChinareverseditsZero-CovidpolicyatthebeginningofDecember,earlierthanexpected.However,China’seconomicgrowthisexpectedtobearound3%in2022,fallingshortoftheIMF'sforecastof3.2%,duetowidespreadlockdownsinQ4.Thisyear,withthecountryreopeningonJanuary8and