APAC | ASEAN growth tracker indicates weak start to Q3

Our ASEAN-6 growth tracker, which includes Indonesia, Malaysia, the Philippines, Thailand, Singapore, and Vietnam, points to a weak start to Q3. Following a gradual pick-up in Q1 and a substantial rebound in Q2 due to favourable base effects, growth slowed to 6.4% y/y in July from 8% y/y in June.

What you will learn from this report:

• Our growth tracker confirms that economic momentum slowed for ASEAN-6 economies in July. We expect growth to deteriorate further in the near term as tight restrictions in several ASEAN economies will weigh on activity.
• Exports and industrial production continued to contribute positively to our tracker, but to a lesser extent than earlier this year. Retail sales dragged on growth across the region in July after a brief rebound.
• We are comfortable with our Q3 growth forecast, which currently lies below our growth tracker’s July outcome. We expect the tracker to weaken further in August, bringing it closer to our Q3 forecast. We think risks are still tilted to the downside given the ongoing pandemic and low vaccination coverage across most of the region.