Macro and Politics

* The CBT will release the September Sectoral Inflation Expectations (SIE) Survey @ 10:00 local time. According to the August Sectoral Inflation Expectations (SIE) Survey, 12-month-ahead annual inflation expectations declined by 0.26pp to 23.69% among market participants, while rising by 0.30pp to 32.80% for the real sector and by 0.64pp to 45.58% for households. The share of households expecting inflation to decline over the next 12 months also fell by 0.78pp to 16.85%. Turning to September, the Survey of Market Participants (SMP) released earlier this month showed the 12-month-ahead CPI expectation unchanged at 23.7%. Against this relatively stable backdrop for market participants, we expect today’s September SIE release to show that the stickiness observed in real sector and household inflation expectations in recent months has remained broadly intact.

* The Consumer Confidence Index rose from 90.8 to 91.9 in September, while its three-month moving average increased from 89.5 to 90.8. Across the sub-components, the financial situation of households at present edged lower, while the financial situation expectation of households and the general economic situation expectation over the next 12 months both improved. The assessment on spending money on durable goods over the next 12 months posted the strongest increase among the sub-components, rising by 3.6% m/m. Following the more pronounced weakening in household consumption in the second quarter, we view the recent improvement in consumer confidence and the September increase in households’ propensity to spend on durable goods as a limited correction at this stage. We will continue to monitor incoming consumption indicators to assess whether these developments translate into a more sustained recovery in domestic demand.