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Central bank meetings

Bank of Thailand (BOT) (Oct 8): Thai fixed income markets are pricing in 25 to 50bps worth of total policy rate cuts over the next three to six months, implying that it is a matter of time before rates are lowered to support the economy, even if not in October to preserve policy space. We see potential for the still-dovish BOT to deliver a 25bps reduction to 1.25% in October. The new BOT Governor, Vitai Ratanakorn, who took office on October 1 and supports accommodative monetary policy, will lead the upcoming review, at a time when Thai economic conditions have softened since the August decision. As of the latest August data, goods export growth has eased to its slowest pace in nearly a year, due to higher US reciprocal tariffs compared to the pause period. Manufacturing output fell sharply for two consecutive months. Services production appeared to be under downside pressure. Private consumption continues to face challenges from weakened consumer confidence, which has fallen to a 32-month low. Foreign tourist arrivals continue to linger below 2024 numbers due to challenges from the Chinese market. Headline inflation, which likely remained below the BOT's 1-3% target in September 2025, would provide room for further monetary accommodation. Lower interest rates could also ease appreciating pressures on the Thai baht amid external headwinds.

Bangko Sentral ng Pilipinas (BSP) (Oct 9): After lowering rates in August, BSP governor Remolona’s remarks pointed to a “slightly less” dovish stance than before when the central bank had undertaken back-to-back cuts. With growth expected to hold up and inflation forecasts adjusted higher but within targets, the economy is likely seen in a near goldilocks state. We expect the benchmark rate to be held unchanged at 5% on Oct 9, though see the possibility of one last rate cut in this cycle in December, following the US Fed’s rate reductions. Our baseline view for the US is three rate cuts in 2025 (including the September move) and one in 2026. Separately, Philippines’ September inflation is expected to quicken to 2% yoy from 1.5% in August, on higher food (rice, perishables, seafood, etc.) and fuel costs. If the actual print is close to our forecast, inflation would have returned to the 2-4% policy target.

Forthcoming data releases

China: M2 growth is expected to rise from 8.8% in August to 8.9% in September, with the gap between M2 and M1 projected to narrow further. The pickup in M1 growth was largely driven by the equity market uptrend. The A-share market extended its rally during the month, reaching levels last seen in 2022. However, this incremental liquidity is unlikely to translate into the real economy, as consumers and investors remain cautious amid the ongoing property downturn and geopolitical tensions.

Taiwan: September trade and inflation data are due. Export growth is expected to remain robust at around 30% yoy. As the US-China tech race continues, strong US demand for GPUs, graphics cards, and AI servers has persisted. Additionally, the delay in semiconductor tariffs may have encouraged continued front-loading in the ICT sector. A favourable calendar effect—due to the different timing of the Mid-Autumn Festival this year versus last year—may also support September’s export figures.

On the inflation front, CPI is expected to remain stable at 1.6% yoy in September. Inflationary pressure remains subdued, supported by a strong currency, which continues to drive down import prices and PPI, as well as a softening labour market and a rise in the number of workers on unpaid leave. Typhoon-related disruptions could temporarily push up fresh food prices. The government’s modest electricity price hike (+0.7% on average, +3.1% for residential users) could contribute to higher services inflation, likely reflected in the October CPI figures.

Overall, the trade and inflation data suggest limited urgency for the central bank to ease monetary policy at its December meeting.

Malaysia: We see slower industrial production growth of 3.0% yoy in August 2025, following the 4.2% yoy acceleration in July. A pullback in manufacturing expansion likely aligned with the deceleration in goods exports growth. This was due to the downside impact from higher US reciprocal tariffs, which rose to 19% from August (compared to 10% during the pause period), despite some support from mining activity.

Vietnam: We foresee slower, yet still resilient, economic growth of 7.2% yoy in 3Q25, down from the accelerated 8.0% yoy expansion in 2Q. This was likely due to easing goods exports growth, as shipments to the US were dampened by higher US reciprocal tariffs of 20%, effective from August (double the 10% rate during the pause period) and faded boost from front-loading, despite sustained support for electronics exports. The exports pullback was likely cushioned by continued robust public investments, the execution of existing foreign investment projects, and resilient retail sales bolstered by foreign tourism. Full-year 2025 growth could potentially outperform our current expectations. However, the trade reliant economy, highly exposed to the US market, will continue to face tariff headwinds into 2026.

Economics Team

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