Asian Economies Face Key Data Tests Next Week

Next week in Asia will be marked by several key data releases that are expected to provide insights into the region's economic performance. India and Australia will release their GDP growth numbers, while China will publish its Purchasing Managers' Index (PMI) data. The Philippines will report its inflation rate, Japan will release retail sales and industrial production figures, and South Korea will announce its trade and inflation data.

In India, GDP growth is expected to ease modestly to 7.5% year-on-year, but the economy should continue to outperform most regional peers. High-frequency indicators point to resilient domestic demand, particularly in private consumption. In Australia, GDP growth is set to slow to 1.8% YoY in 2Q, reflecting ongoing weakness in the housing sector and softer residential investment.

China's PMIs are expected to rebound but remain in contraction territory at 49.5 and 49.4, respectively. Strong external demand may support manufacturing activity, while persistently weak domestic demand is likely to keep both indices below the 50 threshold. In the Philippines, headline inflation is expected to ease modestly to 6.0% YoY amid lower retail fuel prices.

In Japan, industrial production growth is expected to moderate to 3.5% YoY, while retail sales growth is expected to accelerate to 3.1% YoY. South Korea's trade data is expected to show export growth moderating to 61.4% YoY, and imports slowing to 25.2% YoY.

ING notes that the growth backdrop remains constructive in India, underpinned by strong domestic fundamentals and continued momentum in both services and manufacturing activity. However, ING continues to lean towards the Reserve Bank of Australia remaining on hold despite higher inflation expectations.