CEIC Insights | China tech exports; Turkish disinflation; India rupee; Brazil iron; ECB rate cut
Key analysis from the past seven days driven by CEIC's powerful blend of traditional and alternative economic data
Data stories of the week:
How high tech has taken a greater share of China’s exports
China has continually adjusted its export strategy to move up the value chain; the proportion of high-tech products in the nation's trade mix steadily increased from 2020 to 2023.
Earlier in China's industrialization, the nation identified three key sectors for export growth: household appliances, furniture and clothing. Today, these are known as the "Old Three." Now, the focus is on the "New Three": electric vehicles, lithium-ion batteries and solar cells.
The export share of "New Three" products has risen to 4.1% of? total exports, up from 1.5% at the end of 2020. "Old Three" products are still more important in absolute terms, but their relative share slipped -- approaching 9%, down from more than 10% at the end of 2020.
Electric vehicles have notably outperformed amid a weaker export market in 2024; the EV sector is the only one in the "New Three" to post "double growth," i.e. in value and volume, this year. EVs, solar cells and lithium-ion batteries also share a common characteristic: the volume growth rate is outpacing the value growth rate, indicating that prices are declining.
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As ECB cuts rates, inflation retreats across the eurozone
Inflation has finally fallen below the European Central Bank 's target; that's allowed policy makers to make the first back-to-back rate cuts since 2011.
As expected, the ECB loosened policy by 25 basis points at this week's meeting. Before the announcement, Eurostat published the final reading of September inflation; it was revised 0.1 percentage points lower to 1.7% year-on-year. That's the slowest pace since April 2021, and also marked the steepest month-on-month deceleration in a year.
One of the challenges of the currency union is making monetary policy for 20 nations whose economies can be moving in different directions. But as our chart shows, the vast majority of eurozone members saw inflation slow from August to September. (To be sure, rates vary widely across the bloc; Belgian CPI is still rising at a 4%-plus clip, while Irish inflation has hit zero.)
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Turkey's inflation is easing, payment-card data shows
Thanks to a history of unorthodox policy, Turkey has long had one of the world's worst inflation problems. As a result, it has yet to join the global rate-cutting cycle. Policy makers recently held the key rate at 50%, but were cautiously optimistic that price increases would slow.
CEIC offers a high-frequency source that might explain this outlook: payment-card data from the Central Bank of the Republic of Türkiye . (This also gives our users a timely edge on official data; Turkey's statistics office will release October CPI in the first week of November.)
We've charted the consumer price index against a measure of inflation derived from payments made with Turkish credit and debit cards. Our weighted average transaction size index (whose methodology can be accessed by CEIC users) started October by declining for a fifth consecutive week --reaching its lowest value since July 2023. Inflation is stickier when we exclude volatile fuel and food prices, however.
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Rail traffic signals potential slowdown for Brazilian iron ore
Watching transport data for a commodity producer like Brazil can provide deep insights into the economy. Sectors like mining and agriculture depend on Brazil's road and rail networks to get their products to domestic customers and ocean-going vessels for export.
This week, we turn to a key ingredient for steelmaking: iron ore. Production might be topping out, according to railway cargo figures recently added to the CEIC platform. The volume of iron ore transported by rail from two key producing states, Para and Minas Gerais (which translates to “General Mines”), was roughly stable in the five months through August.
This likely reflects two conflicting trends. Iron ore exports from Brazil have risen significantly; however, on the domestic demand side,?steelmakers have accused foreign producers of "dumping." In September, domestic steel production was 2.7 million tons; that's 10% below the all-time peak recorded in November 2021.
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In the 10 years to August 2024, the volume of iron ore transported by rail grew by 50%. This data can serve as an alternative to the country’s industrial production index for mineral extraction (which covers both mining and oil). Some of our data is sourced from the 120-year-old Vitória-Minas Railway, which is owned by mining giant 淡水河谷 .
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India's tumbling rupee, fund outflows and the RBI's softer stance
The Fed's big rate cut in September had a knock-on effect for the Indian rupee that didn’t last. After surging against the dollar, the currency retreated against the greenback as stubborn US inflation data cast doubt on future Fed easing.
Back home, meanwhile, Mumbai's policy makers have taken a dovish turn. The INR hit an all-time low against USD after the Reserve Bank of India (RBI) changed its stance from its previous rhetoric of “withdrawal of accommodation” to a “neutral” stance. The RBI's remarks also resulted in a continued narrowing of the spread between Indian benchmark government bonds and their US counterparts.
Fund flows were probably also a factor in the rupee weakness. Asset-allocation data from our partners at EPFR shows a weekly net outflow from Indian equities for the first time since March 2023.
A less restrictive stance from the RBI would also reflect the nation's general disinflationary trend, though food prices have ticked higher lately.
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Other News from ISI Markets
2025 South Korea Economic Outlook
We invite you to join us at our South Korea 2025 Economic Outlook event on October 29 in Seoul. We will offer expert analysis and forward-looking perspectives on these issues, tapping the power of CEIC’s machine learning-driven economic nowcasts alongside EPFR’s global fund-flow insights.
Global Supply Chain Restructuring: Opportunities and Challenges in Southeast Asia
Thursday, Oct 24, 2024 | 3:00 PM - 4:00 PM CST
Webinar Language: Chinese
The Southeast Asia region, with its young workforce, rapidly growing consumer market, and advancements in regional economic integration, offers unique opportunities for the restructuring of global supply chains.
This webinar will explore Southeast Asia's role in global supply chain restructuring, analyze its opportunities and challenges, and provide data insights from a macroeconomic and industry perspective.
EMIS presents: Moody's Outlooks for APAC & Eastern Europe
You’re invited to a special series of webinars hosted by Moody's Analytics. Each webinar will run for 45 minutes, followed by a dedicated Q&A session.
Tuesday, 5th November - 8 AM GMT APAC Outlook: Divergent Paths Katrina Ell, Director and Senior Economist at Moody's Analytics, will explore the economic trends shaping Asia-Pacific in 2025, including the impact of easing global monetary policies.
Wednesday, 6th November - 2 PM GMT Eastern Europe Economic Outlook and Risks Dr. Gaurav Ganguly, Head of EMEA Economics at Moody's Analytics, will discuss Eastern Europe's recovery and the Middle East's robust growth, highlighting potential risks to regional stability.
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