Asia: Material improvement in external positions - ANZ

According to ANZ analysts, for the Asian economies, there has been considerable improvement in the trade balances of India, Indonesia, and the Philippines.

Key Quotes

“Weak energy as well as non-energy imports underlie this correction, with the latter symptomatic of sluggish domestic activity and investment in particular.”

“Existing fiscal policies and anticipated monetary easing measures will be unable to reverse the weakness in non-energy imports. On the other hand, as the three economies are all net oil importers, a sustained oil price rally can moderate or even reverse this progress.”

“Overall, the improvement in the trade balances is a positive development. Even though symptomatic of weak investment activity, we need to bear in mind that large current account deficits were a key source of currency weakness in 2018.”