
Softening demand but rising inflation strains monetary outlook
Softening demand but rising inflation strains monetary outlook
External momentum stayed firm in November, with exports and imports up 15.1% and 16.0% y/y, FDI disbursements rising 9.5% y/y, and tourism arrivals climbing 15.6% y/y to 19.1mn in 11M25 (117% of pre-COVID levels) and surpassing the full-year record set in 2019. Strong public investment (up 21.5% y/y in November) and a USD1.1bn monthly trade surplus continued to underpin macroeconomic stability despite sequential trade softness. Yet flat retail sales (m/m) slowed annual growth and undershot our full-year expectations, while inflation’s rise to 3.58% y/y, alongside softer domestic demand, suggests a more challenging monetary policy outlook ahead.