Strong growth in Vietnam, BSP hiking cycle not over

Vietnam’s GDP growth surged to 10% y/y in the third quarter. However, rapid credit growth of around 20% is helping to fuel the boom, raising concerns that bad loans could rise and growth could slow sharply further ahead.

Meanwhile, inflation rose in both the Philippines and Taiwan in September. We expect the BSP to raise interest rates by 25bp to 5.25% this month, but weak economic growth should limit further hikes. In Taiwan, we expect the CBC to keep rates on hold at 2.00%, as the latest rise in inflation largely reflects higher food and energy prices and base effects.