Central bank meetings

Reserve Bank of India (RBI) (Aug 6): The RBI monetary policy committee (MPC) is expected to provide clarity on the rate guidance this week. Market participants have pared bets on further cuts after a bigger 50bp rate reduction in June was accompanied by a stance change from accommodative to neutral, besides a phased reduction in the cash reserve ratio (bet Sep to Nov 2025). We have a rate cut call for the August meeting but note that recent official commentary has been cautious. Governor Malhotra said that there was room to lower rates if growth disappoints and inflation undershoots expectations but expects policy transmission to take precedence in the near-term. Inflation decelerated sharply in June (and is likely to slip below 1.5%yoy in July), which will necessitate a 40-50bp downward revision in the official CPI forecast (see note). There have also been additional headwinds from the high tariff announcement. Nonetheless, we acknowledge the risk that the cut might be deferred to the September meeting.

Forthcoming data releases

China: Export growth is expected to decelerate from 5.9%yoy in June to 5.2% in July, amid a slowdown in front-loading activities ahead of the implementation of the global reciprocal and transshipment tariffs. Container ship deadweight tonnage at 20 major Chinese ports declined from an average of 1.48mn tons per day in June to 1.25mn tons per day over the last two weeks of July. The new export orders sub-index in the PMI dropped further, from 47.7 in June to 47.1 in July, remaining in contraction territory for the 15^th consecutive month. The 40% U.S. transshipment tariffs on various countries will pose a risk to demand for Chinese goods moving forward.

On inflation, CPI is expected to fall by 0.1%yoy in July, compared to 0.1% growth in June. Household sentiment remains under pressure due to weak job prospects and slowing income growth. Elevated youth unemployment and declining property prices stress are likely to weigh further on consumer spending.

South Korea: CPI inflation is expected to hold steady at around 2.0%yoy in July, down slightly from 2.2% in June. This reflects continued softness in imported oil prices and subdued domestic consumer demand. While property prices have rebounded in the Seoul area, they remain broadly stable nationwide, with limited passthrough to rental costs. From a monetary policy perspective, the current inflation trend provides the Bank of Korea with room to deliver one additional rate cut. We expect one final rate cut at the August policy meeting, lowering the base rate from 2.50% to 2.25%.

Taiwan: July trade and inflation data are due this week. Export growth is expected to remain strong at around 30%yoy, supported by the extension of the reciprocal tariff deadline and resilient demand for AI-related goods. The surge in exports contributed to a sharp acceleration in GDP growth, which rose to 8.0%yoy in 2Q, up from 5.5% in 1Q. Even accounting for a potential export payback in 2H, full-year GDP growth remains on track to reach 4%.

On inflation, CPI is likely to remain subdued at 1.5% yoy in July, reflecting weak import prices and declining property prices. However, fresh food prices—affected by recent typhoons—pose an upside risk. A further and sustained slowdown in inflation below 1.5% would be required to create space for policy easing. We continue to expect the central bank to keep the policy rate unchanged at the September meeting.

Malaysia: We foresee Malaysia’s industrial production (IP) slowing for the third consecutive month, slipping into contraction of 0.1%yoy in June 2025, which marked the first decline since end-2023. Mining likely remained a drag, while June’s goods exports data reflected a fading of order front-loading, which likely weighed on export-oriented manufacturing activity. While the US has lowered reciprocal tariffs on Malaysian imports to 19% starting August 1, down from 24% threatened on Liberation Day, the still-high US tariffs and associated uncertainty surrounding potential US semiconductor levies present a challenging outlook for Malaysia’s externally driven economy in 2H25.

Thailand: We anticipate Thailand’s inflation to remain subdued at -0.3%yoy in July 2025, registering a negative reading for the fourth consecutive month. This was primarily attributable to lower energy prices, while core inflation likely remained stable at around 1% YoY. With headline inflation remaining well below the Bank of Thailand’s 1-3% target range, we see room for the central bank to further ease monetary policy to support the economy, which faces various domestic and external challenges, including those stemming from high US tariffs. US tariffs on Thai imports will be high at 19% starting August 1, despite being lowered from the initially threatened 36%.

Vietnam: We foresee continued solid growth in goods exports of 14.5%yoy in July 2025, marking the sixth consecutive month of double-digit expansion. Front-loaded shipments to the US are likely to be the key driver. The US reciprocal tariff rate on Vietnam’s imports will increase to 20% (40% for transshipped goods) in August from the global 10% baseline during the pause. Vietnamese electronics shipments also continued to benefit from the US tariff exemption on key electronics products, while US tariffs on semiconductors remain under consideration. Headline inflation likely eased to 3.3%yoy in July 2025, down from a temporary uptick to 3.6%yoy in June 2025. Contained headline inflation, which remains below the central bank’s 4.5% target for 2025, provides room for a lower refinancing rate when external headwinds assert more meaningfully in 2H25.

Indonesia: High frequency indicators moderated in 2Q, including consumer confidence, real credit and government expenditure. DBS proxy monthly indicator for consumption demand also eased in the latest reading. Manufacturing PMIs have remained in the contractionary zone for three consecutive months to June 2025. Our inhouse GDP Nowcast concurs, forecasting a slower print in 2Q. We expect GDP to register a growth rate of 4.8% in 2Q from 4.9% in 1Q25. Rate cuts are underway to shore growth, with the government laying out plans to introduce a third package of stimulus in 2H25, which could bode well for demand, particularly for lower income households. The relatively narrower scope of stimulus support is likely to translate into a marginal impact on growth, offset by payback from export frontloading and global uncertainty. These two-way forces are likely to keep growth below 5% in 2H as well.

Economics Team


To read the full report, click here to Download the PDF.