Major economies across Asia are set to release a series of important economic indicators in the coming week, covering trade balances, inflation and growth figures for China, Taiwan, India, Japan and South Korea. The releases come against a backdrop of elevated global inflation and supply chain pressures, with the region's export-driven economies navigating both strong external demand and rising input costs.

China: Strong trade growth and higher inflation

China is scheduled to publish trade and inflation data. Trade performance has been very strong year-to-date, and this momentum is expected to continue into August. Forecasts point to export growth of 24.1% year-on-year and import growth of 32.4%, which would bring the August trade surplus to $107.0bn.

CPI inflation is expected to rebound moderately in August, rising to 0.9% YoY from 0.5% in July, supported by a likely rebound in fuel prices. Even so, inflation remains well below the levels seen in many other major economies, giving Chinese policymakers more room to support growth even as counterparts elsewhere tighten policy.

Taiwan: Trade strength, even as inflation moderates

Taiwan also releases trade and inflation figures. Prices are expected to moderate slightly but remain above target at 2.3% YoY. Additional upside surprises could increase pressure on the central bank to hike rates later this month. Market participants are divided on whether upcoming local elections would rule out a rate hike, but historical cycles suggest this should not be a major factor.

Continued strong export orders point to solid trade growth in August, with exports forecast up 32.7% YoY and imports up 33.5%, producing a trade surplus of $21.9bn. Taiwan's semiconductor-heavy export base has been a key driver of this momentum amid sustained global chip demand.

India: Inflation set to rise on food and fuel pressures

CPI inflation is expected to increase to 4.7% YoY. The pickup is projected to be driven by food price pressures resulting from weak monsoons — visible especially in sugar and rice prices — along with the spillover of higher fuel prices into core inflation. Food carries a substantial weight in India's CPI basket, making monsoon-dependent agricultural output a recurring swing factor for the inflation outlook and, by extension, for the Reserve Bank of India's policy stance.

Japan: Revised Q2 GDP, current account and PPI

Japan will release revised Q2 GDP and July current account data on Tuesday. Market consensus expects GDP growth to be revised up to 0.4% quarter-on-quarter, equivalent to 1.8% annualised, from the previous estimates of 0.3% QoQ and 1.1% annualised respectively.

Japan's current account is expected to rebound to a surplus of JPY 285bn in July, following a JPY 92.3bn deficit in June. The trade balance is expected to remain in deficit at JPY 268.4bn. Income from Japan's overseas investments should continue to support the overall current account balance.

On Friday, Japan will publish its August producer price index (PPI). The market expects it to accelerate to 7.4% YoY, from 7.2% in July. Such a pickup would indicate that upstream price pressures remain elevated, potentially sustaining the pass-through of higher input costs to consumer prices — a key consideration for the Bank of Japan as it continues to weigh whether years of ultra-loose policy can be maintained.

Korea: Revised Q2 GDP to confirm robust growth

South Korea will release revised Q2 GDP data on Tuesday. Market consensus expects growth to remain unchanged from the preliminary estimate at 0.6% QoQ and 3.7% YoY. This would confirm robust second-quarter growth, supported by continued strength in exports, particularly technology and semiconductor shipments. As one of Asia's most export-reliant economies, Korea's trade figures are closely watched as a bellwether for global demand.

Source: ING