Asia week ahead: Indian rate decision and data on Philippines, Indonesia, China
India: RBI expected to keep rates unchanged We expect the Reserve Bank of India to keep the repo rate unchanged at 5.25% on Wednesday. While headline inflation surprised to the upside in June, largely due to higher fuel prices, underlying price pressures remain contained. Core inflation continues to run below the RBI’s target, providing policymakers ...
The Reserve Bank of India is expected to maintain its repo rate at 5.25% during a Wednesday meeting. While June's headline inflation rose due to higher fuel costs, core inflation remains below the RBI's target, offering policymakers enough flexibility to stay on hold with policy rates. Policymakers are closely watching the effects of elevated oil prices and a potential El Niño event on food prices.
Philippines GDP growth is forecasted to stay subdued in the second quarter at 3.5% year-on-year. This is due to high oil prices and ongoing political uncertainty dampening investment. However, government spending, which contracted in the second half of 2025, may provide some support to domestic demand. Export growth is anticipated to pick up, driven by increasing integration into the AI supply chain.
Yet, higher oil and non-oil import prices may put downward pressure on the trade balance, leading to a smaller net contribution from external demand to overall GDP growth. CPI inflation for July is expected to stay at 6.4% year-on-year, with food inflation easing slightly following the steep jump in June. Fuel inflation is still expected to rise due to retail fuel price hikes.
Service inflation is anticipated to remain stubborn, reflecting persistent price pressures in this sector.
Indonesia's GDP growth is projected to slow significantly to 5.0% year-on-year in the second quarter from 5.6% previously. This is primarily due to weak business confidence and private investment. The trade balance is also expected to deteriorate as exports slow while oil imports remain robust, driven by higher oil prices.
China is set to release trade data on Friday. Exports and imports are expected to remain robust, with exports growing by 28.1% year-on-year and imports expanding by 33.6% year-on-year, resulting in a trade surplus of $112.6 billion. Tech-related categories are expected to continue driving trade. Markets may continue to observe China's oil import trends to gauge whether they are recovering or stagnating further.
Taiwan will release inflation and trade data on Wednesday and Thursday, respectively. Inflation is expected to ease slightly to 2.4% year-on-year, staying above the target. A slight overperformance might put more pressure on September's rate hike, while underperformance could decrease this pressure. Taiwan's trade data is expected to show an increase in both exports and imports, with exports at 43.6% year-on-year and imports at 56.4% year-on-year, giving a trade surplus of $15.2 billion. Trade growth is forecast to keep a strong momentum into the third quarter.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
