January 24, 2025 • 9 mins
In this episode, Michelle welcomes listeners and provides an overview of the top stories in Southeast Asian markets. She begins with an analysis of Singapore's economic policy, discussing growth and inflation forecasts, supported by recent data analysis. The focus then shifts to Vietnam, where she examines the country's economic outlook and growth projections amidst evolving global conditions. Michelle also delves into Indonesia's coal mining sector, exploring the new export earnings mandate and its implications for the industry. The episode concludes with closing remarks and a call to action, encouraging listeners to stay informed on these critical economic developments.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Singapore eases monetary policy for thefirst time since 2020.
Second, Vietnam is poised to be Asia-Pacific'sfastest-growing economy in 2026 according to
(00:22):
the World Bank.
Third, Indonesia's one hundred percent exportsearning deposit mandate is expected to impair
coal miners' cash flow.
Let's dive into our first story.
On Friday, the Monetary Authority of Singapore,often referred to as MAS, announced a slight
easing of its monetary policy.
(00:45):
This marks the first such adjustment since2020.
In a move that reflects a response tomoderating economic conditions, MAS decided to
reduce the slope of the Singapore DollarNominal Effective Exchange Rate, or S$NEER,
policy band slightly.
However, it maintained both the width of thepolicy band and the level at which it is
(01:08):
centered.
The decision comes amid a slowdown inSingapore's economic growth momentum and a
faster-than-expected moderation in coreinflation this year.
The MAS forecasts core inflation, whichexcludes the costs of accommodation and private
transport, to average between one point zeropercent and two point zero percent in 2025.
(01:29):
Meanwhile, the Consumer Price Index for allitems is projected to average between one point
five percent and two point five percent.
Recent data shows that Singapore's coreinflation, as measured by the Consumer Price
Index, eased to one point eight percentyear-on-year in December, slightly down from
one point nine percent in November.
(01:51):
This decline was attributed primarily to amoderation in services inflation, according to
the Ministry of Trade and Industry and theMonetary Authority of Singapore.
On a month-to-month basis, the core ConsumerPrice Index rose by zero point five percent.
The core Consumer Price Index excludes privatetransport and accommodation costs to provide a
(02:13):
more accurate measure of household expenses,offering insights into the underlying inflation
trends affecting consumers.
For the full year of 2024, core inflationaveraged two point seven percent, showing a
decline from the four point two percentrecorded in 2023.
This trend highlights a significant easing ininflationary pressures, which has prompted the
(02:35):
MAS to take preemptive measures in its monetarypolicy.
Meanwhile, all-items inflation in Singaporeheld steady at one point six percent
year-on-year in December.
The authorities noted that while there waslower core and accommodation inflation, this
was offset by a milder decline in privatetransport costs, suggesting a mixed
(02:55):
inflationary landscape.
Now, let's turn our attention to Vietnam, whichis gearing up to become the fastest-growing
economy in the Asia-Pacific region by 2026.
According to the latest report from the WorldBank, Vietnam is projected to achieve a Gross
Domestic Product growth rate of six point threepercent.
(03:17):
This positions the country ahead of itsregional peers, with the Philippines expected
to grow by six percent and Indonesia by fivepoint one percent.
The World Bank's 'Global Economic Prospects'report sheds light on Vietnam's impressive
economic trajectory.
It forecasts Vietnam's Gross Domestic Productgrowth to reach six point six percent in 2025,
(03:39):
marking a slight increase of zero point onepercentage points from its previous projection
in October 2024.
This upward revision underscores the country'srobust economic fundamentals and its potential
to lead the region's growth in the comingyears.
Vietnam's growth prospects are bolstered byseveral key factors.
(04:00):
The nation has been strategically investing ininfrastructure development, which is expected
to enhance connectivity and stimulate economicactivities.
Additionally, Vietnam's integration into globalsupply chains has been a significant driver of
economic expansion.
As multinational corporations seek to diversifytheir supply chains, Vietnam has become an
(04:22):
attractive destination for foreign directinvestment, particularly in the manufacturing
and technology sectors.
Moreover, Vietnam's young and dynamic workforceis a crucial asset.
With a median age of around thirty years, thecountry boasts a labor force that is not only
abundant but also increasingly skilled.
This demographic advantage positions Vietnamwell to capitalize on opportunities in emerging
(04:46):
sectors such as technology and innovation.
The government's proactive policy measures havealso played a pivotal role in fostering
economic growth.
Vietnam has been implementing reforms aimed atimproving the business environment, enhancing
regulatory frameworks, and promoting digitaltransformation.
These efforts are expected to further boostinvestor confidence and attract more capital
(05:11):
inflows.
However, it's important to note that Vietnam'seconomic ascent is not without challenges.
The country must navigate potential risks suchas global economic uncertainties, trade
tensions, and environmental sustainabilityconcerns.
Addressing these issues will be crucial formaintaining its growth momentum and achieving
(05:32):
long-term economic stability.
In conclusion, Vietnam's outlook as thefastest-growing economy in the Asia-Pacific
region is a testament to its strategic economicpolicies and dynamic growth drivers.
As we move closer to 2026, all eyes will be onVietnam to see how it navigates its path to
(05:52):
sustained economic success.
Finally, let's delve into the latestdevelopments in Indonesia's coal mining sector.
The Indonesian government's recent regulationnow mandates that commodity exporters deposit
one hundred percent of their dollar-denominatedexport earnings into the domestic financial
system for one year.
(06:13):
This regulation is likely to exacerbatecash-flow challenges for coal miners, who are
already grappling with multi-year low prices,and could further strain the financial
stability of the country's coal sector.
This is a significant shift from the previousrequirement, which only mandated that exporters
reserve thirty percent of their revenue inIndonesian financial institutions for a minimum
(06:36):
of three months.
Coordinating Minister for the Economy AirlanggaHartarto indicated that the process for Dollar
Earnings from Exports has been completed, withthe preparation of the Government Regulation
underway.
The aim is to bolster Indonesia's foreignexchange reserves, further strengthening the
economy.
(06:57):
The new mandate could lead to increasedfinancing costs for coal producers.
Many miners may find themselves needing toborrow additional funds to cover operational
expenses due to shrinking profit margins, whichcould result in an additional financial burden
or even lead to the closure of mines.
However, there is an exemption for exportsvalued below two hundred fifty thousand dollars
(07:20):
per transaction, which aims to provide leniencyto small exporters with limited capital and
transactions, ensuring their competitiveness inthe international market.
While the official document does not specify adate, local media reports suggest that the
regulations will be enforced starting Marchfirst.
This comes at a time when small miners arealready facing tough conditions, with demand
(07:45):
from major consumers like China and India atall-time lows, and prices for Indonesian
thermal coal across grades reaching multi-yearlows.
For instance, the price for Kalimantan fourthousand two hundred kilocalories per kilogram
grade coal was forty-eight dollars andtwenty-five cents per metric ton free on board
(08:05):
on January twenty-second, the lowest sinceApril fifteenth, two thousand twenty-one.
It is worth noting that Indonesia's coal sectoris highly fragmented, with hundreds of
producers.
While miners can withdraw Indonesian Rupiah asloans, the interest incurred from these loans
is often higher than the financial incentivesoffered by the national government, which could
(08:29):
increase business costs in the long term.
Despite these challenges, Indonesia remains theworld's largest coal exporter, having sold over
five hundred fifty-five million metric tons toforeign countries in two thousand twenty-four,
with China and India being the largestimporters.
In summary, the Indonesian government's mandatefor exporters to deposit one hundred percent of
(08:52):
their earnings in domestic banks is a bold moveaimed at boosting foreign exchange reserves but
could pose significant challenges for the coalmining sector.
The regulation's impact on the industry'sfinancial health will be a critical area to
watch as the year unfolds.
Alright, that's a wrap for this episode.
(09:13):
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, Singapore eases monetary policy for thefirst time since 2020.
Second, Vietnam is poised to be Asia-Pacific'sfastest-growing economy in 2026 according to
(00:22):
the World Bank.
Third, Indonesia's one hundred percent exportsearning deposit mandate is expected to impair
coal miners' cash flow.
Let's dive into our first story.
On Friday, the Monetary Authority of Singapore,often referred to as MAS, announced a slight
easing of its monetary policy.
(00:45):
This marks the first such adjustment since2020.
In a move that reflects a response tomoderating economic conditions, MAS decided to
reduce the slope of the Singapore DollarNominal Effective Exchange Rate, or S$NEER,
policy band slightly.
However, it maintained both the width of thepolicy band and the level at which it is
(01:08):
centered.
The decision comes amid a slowdown inSingapore's economic growth momentum and a
faster-than-expected moderation in coreinflation this year.
The MAS forecasts core inflation, whichexcludes the costs of accommodation and private
transport, to average between one point zeropercent and two point zero percent in 2025.
(01:29):
Meanwhile, the Consumer Price Index for allitems is projected to average between one point
five percent and two point five percent.
Recent data shows that Singapore's coreinflation, as measured by the Consumer Price
Index, eased to one point eight percentyear-on-year in December, slightly down from
one point nine percent in November.
(01:51):
This decline was attributed primarily to amoderation in services inflation, according to
the Ministry of Trade and Industry and theMonetary Authority of Singapore.
On a month-to-month basis, the core ConsumerPrice Index rose by zero point five percent.
The core Consumer Price Index excludes privatetransport and accommodation costs to provide a
(02:13):
more accurate measure of household expenses,offering insights into the underlying inflation
trends affecting consumers.
For the full year of 2024, core inflationaveraged two point seven percent, showing a
decline from the four point two percentrecorded in 2023.
This trend highlights a significant easing ininflationary pressures, which has prompted the
(02:35):
MAS to take preemptive measures in its monetarypolicy.
Meanwhile, all-items inflation in Singaporeheld steady at one point six percent
year-on-year in December.
The authorities noted that while there waslower core and accommodation inflation, this
was offset by a milder decline in privatetransport costs, suggesting a mixed
(02:55):
inflationary landscape.
Now, let's turn our attention to Vietnam, whichis gearing up to become the fastest-growing
economy in the Asia-Pacific region by 2026.
According to the latest report from the WorldBank, Vietnam is projected to achieve a Gross
Domestic Product growth rate of six point threepercent.
(03:17):
This positions the country ahead of itsregional peers, with the Philippines expected
to grow by six percent and Indonesia by fivepoint one percent.
The World Bank's 'Global Economic Prospects'report sheds light on Vietnam's impressive
economic trajectory.
It forecasts Vietnam's Gross Domestic Productgrowth to reach six point six percent in 2025,
(03:39):
marking a slight increase of zero point onepercentage points from its previous projection
in October 2024.
This upward revision underscores the country'srobust economic fundamentals and its potential
to lead the region's growth in the comingyears.
Vietnam's growth prospects are bolstered byseveral key factors.
(04:00):
The nation has been strategically investing ininfrastructure development, which is expected
to enhance connectivity and stimulate economicactivities.
Additionally, Vietnam's integration into globalsupply chains has been a significant driver of
economic expansion.
As multinational corporations seek to diversifytheir supply chains, Vietnam has become an
(04:22):
attractive destination for foreign directinvestment, particularly in the manufacturing
and technology sectors.
Moreover, Vietnam's young and dynamic workforceis a crucial asset.
With a median age of around thirty years, thecountry boasts a labor force that is not only
abundant but also increasingly skilled.
This demographic advantage positions Vietnamwell to capitalize on opportunities in emerging
(04:46):
sectors such as technology and innovation.
The government's proactive policy measures havealso played a pivotal role in fostering
economic growth.
Vietnam has been implementing reforms aimed atimproving the business environment, enhancing
regulatory frameworks, and promoting digitaltransformation.
These efforts are expected to further boostinvestor confidence and attract more capital
(05:11):
inflows.
However, it's important to note that Vietnam'seconomic ascent is not without challenges.
The country must navigate potential risks suchas global economic uncertainties, trade
tensions, and environmental sustainabilityconcerns.
Addressing these issues will be crucial formaintaining its growth momentum and achieving
(05:32):
long-term economic stability.
In conclusion, Vietnam's outlook as thefastest-growing economy in the Asia-Pacific
region is a testament to its strategic economicpolicies and dynamic growth drivers.
As we move closer to 2026, all eyes will be onVietnam to see how it navigates its path to
(05:52):
sustained economic success.
Finally, let's delve into the latestdevelopments in Indonesia's coal mining sector.
The Indonesian government's recent regulationnow mandates that commodity exporters deposit
one hundred percent of their dollar-denominatedexport earnings into the domestic financial
system for one year.
(06:13):
This regulation is likely to exacerbatecash-flow challenges for coal miners, who are
already grappling with multi-year low prices,and could further strain the financial
stability of the country's coal sector.
This is a significant shift from the previousrequirement, which only mandated that exporters
reserve thirty percent of their revenue inIndonesian financial institutions for a minimum
(06:36):
of three months.
Coordinating Minister for the Economy AirlanggaHartarto indicated that the process for Dollar
Earnings from Exports has been completed, withthe preparation of the Government Regulation
underway.
The aim is to bolster Indonesia's foreignexchange reserves, further strengthening the
economy.
(06:57):
The new mandate could lead to increasedfinancing costs for coal producers.
Many miners may find themselves needing toborrow additional funds to cover operational
expenses due to shrinking profit margins, whichcould result in an additional financial burden
or even lead to the closure of mines.
However, there is an exemption for exportsvalued below two hundred fifty thousand dollars
(07:20):
per transaction, which aims to provide leniencyto small exporters with limited capital and
transactions, ensuring their competitiveness inthe international market.
While the official document does not specify adate, local media reports suggest that the
regulations will be enforced starting Marchfirst.
This comes at a time when small miners arealready facing tough conditions, with demand
(07:45):
from major consumers like China and India atall-time lows, and prices for Indonesian
thermal coal across grades reaching multi-yearlows.
For instance, the price for Kalimantan fourthousand two hundred kilocalories per kilogram
grade coal was forty-eight dollars andtwenty-five cents per metric ton free on board
(08:05):
on January twenty-second, the lowest sinceApril fifteenth, two thousand twenty-one.
It is worth noting that Indonesia's coal sectoris highly fragmented, with hundreds of
producers.
While miners can withdraw Indonesian Rupiah asloans, the interest incurred from these loans
is often higher than the financial incentivesoffered by the national government, which could
(08:29):
increase business costs in the long term.
Despite these challenges, Indonesia remains theworld's largest coal exporter, having sold over
five hundred fifty-five million metric tons toforeign countries in two thousand twenty-four,
with China and India being the largestimporters.
In summary, the Indonesian government's mandatefor exporters to deposit one hundred percent of
(08:52):
their earnings in domestic banks is a bold moveaimed at boosting foreign exchange reserves but
could pose significant challenges for the coalmining sector.
The regulation's impact on the industry'sfinancial health will be a critical area to
watch as the year unfolds.
Alright, that's a wrap for this episode.
(09:13):
If you enjoyed this brief, and would like tostay updated on latest episodes, don’t forget
to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
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