Deutsche Bank-Asia Week Ahead What you need to know 22 - 26 July-109319503

20July2024DeutscheBankResearchAsiaEconomicsAsiaWeekAheadDateWeekaheadWeexpecttheCentralBankofSriLanka(CBSL)tocutthepolicyrateby50bpsnextweek.ThecentralbankdeliveredthelastratecutinMarch2024by50bpsandhasalreadydelivered700bpsofcutsthusfar,butweexpectanother50bps,asrealratesremainpositivebyover500bpsonaforwardlookingbasis,withinflationhavingfallensharplysince2H2023.SriLanka'sCPIinflationcameat1.7%yoyinJune,afterfallingto0.9%inMay.InflationwasalsolowinAprilat1.5%andMarchat0.9%,ledbythereductioninelectricitytariff,fuelandLPGprice.Theauthoritieshavecutpowerpricesonceagainthisweekby22.5%andthiswilllikelykeepinflationinlow-single-digitsfornow.Thenextmonetarypolicyisscheduledinend-September,whichisclosetothePresidentialelections,likelytobeheldsometimebetweenSeptemberandOctober.Therefore,timingwise,nextweeklookslikeanopportunemomentfortheCBSLtocutthepolicyrateby50bps,particularlywithinflationremaininglowatthisstage.WeexpectSouthKorea'sGDPgrowthtoslowto2.4%YoYinQ2from3.1%inQ1,weigheddownbyweaknessindomesticdemand.Wehadearlierassessedthatwhiletheeconomyisontracktoexpand2.5%in2024,itsgrowthrecoveryshouldbedivergent,ledbytheexport-orientedandlargebusinesses,whiledomestic-facingandSMEshavealesssanguineoutlook(seeourlatestnoteonSouthKoreaandBoK).Taiwanindustrialproductionisexpectedtofurtherimproveto18%YoYinJunefrom16%inMay,...