- July's inflation rose to 2.37% YoY, driven entirely by temporary food and seasonal education costs. Core inflation continues its slowing trend, signaling a stagnant economic activity.
- Despite current softness, leading indicators like accelerating money supply and falling real interest rates point to a potential economic turnaround in the second half. These factors are expected to boost both credit growth and consumer spending.
- Inflation is forecast to remain stable, providing BI with room for further monetary easing. We maintain our expectation for one to two rate cuts by year-end, contingent on the Fed initiating its own cuts in Q4-25.
