Deutsche Bank-Asia Week Ahead What you need to know 19-23 August-109914052(1)

19August2024DeutscheBankResearchAsiaEconomicsAsiaWeekAheadDateWeekaheadWeexpectBankofKorea(BoK)tocutby25bpsnextweek,withweakdomesticdemandandrisingNPLscallingformonetarypolicyeasingsoonerratherthanlater.Thepassivemonetarypolicytighteningamidfallinginflationhasdraggedondomesticdemand,creatingadivergenteconomywithrisingriskstothevulnerableevenasexternaldemandremainedrobust.BankIndonesia(BI)isexpectedtokeepitspolicyrateunchanged,tomaintainrupiahstabilityperourearliercall,withmarketvolatilityinthepasttwoweeksreinforcingourview.CPIinflationaveraged2.7%YoYinJan-Jul2024andBIexpectsitto“remainundercontrolandwithinthetargetcorridor”of1.5-3.5%fortheyear.WeexpectBankofThailand(BoT)tokeepitspolicyrateunchangeddespitethesignificantuncertaintysurroundingthedigitalwallet(DW)programmeaftertheremovalofPrimeMinisterSrettaThavisin.IfDWdoesindeedgetscrapped,asthemediareports,suchamovemaycallformoreaggressiveratecutsbytheBoTthanourprevailingforecastofa25bpsratecutinthiscycle,asitweighsonitsgrowthoutlookfromQ4andbeyond.AsforQ2,wemaintainourgrowthforecastat2.2%yoy.HongKongJulyCPIinflationisexpectedtostayunchangedat1.5%YoY.BaseeffectsfromtheexpirationofgovernmentsubsidiesonelectricityinMay2024wouldcontinuetocontributetoinflationoutturns.MalaysiaCPIisexpectedtoedgeupto2.1%yoyinJuly,from2.0%inJune.CPIinflationhasaveragedonly1.8%inth...