Asia Economic Diary:Jan 09-13

Bank of Korea (BoK) meets on Friday next week; we expect it to keep the call rate unchanged at 1.25%. While we continue to expect a steady policy rate ahead, near term risks to our view remain tilted to the downside amid ongoing domestic political crisis.

    China will report CPI, PPI, M2 and trade data for December next week; we expect CPI inflation to ease slightly to 2.2% in December from 2.3% in November while PPI (4.7% vs. 3.3%) and M2 (12.2% vs. 11.4%) likely rose at a faster pace. China likely registered a higher trade surplus of USD45.9bn in December from USD44.2bn in November, albeit lower than USD59.6bn in Dec’15, as exports contracted by 1.6% amid a surge in imports (6.2%yoy in Dec vs. 4.7%yoy in Nov).

    India’s CPI inflation probably rose slightly to 3.7% in December from 3.6% in November as food prices continue to remain low. CPI inflation is also likely to remain below 4.0% for the month of January, prompting RBI to likely deliver a rate cut in February’s meeting. Meanwhile, we expect India’s industrial production to move to positive territory (+3.0%yoy in Nov vs. -1.9%yoy in Oct). This is mainly due to Diwali-holiday led distortion in working days (Diwali was in October last year resulting in lesser working days while in 2015 Diwali was celebrated in November).