9 January 2024Deutsche BankResearch Asia Economics Asia Week Ahead Date Weeks aheadChina inflation is likely to rebound slightly in December, with CPI forecast to be -0.4% yoy and PPI to be -2.5%, which is in line with the improvement in price PMIs. M2 is expected to stay largely unchanged at 10.1% in December from 10.0% in November. Imports are forecast to turn positive to 4% from -0.3%, while exports are likely to stay at -1%.India's industrial production growth is expected to moderate to 4.0%yoy in November, as the adverse impact of the Diwali holiday effect kicks in. Already, core infrastructure production growth has moderated in November to 7.8%, from 12.0% in October. Given such idiosyncrasies, we prefer comparing the average of Oct-Nov growth between 2022 and 2023 to ascertain the true momentum of the industrial sector.The Bank of Korea is likely to keep its policy rate unchanged on 11 January, with its statement suggesting that rates will remain at the current level (3.5%) for some time. While manufacturing and export data surprised to the upside, expanding 5.3%yoy and 5.1%, respectively, in November and December, rising concerns over builders (project financing) and lower-than-expected inflation (3.2% vs.3.4% in December) have tilted risks to rates through 2024 to the downside.Financial Condition IndicatorsAdvanced Asian economies' financial conditions eased across the board at the end of 2023, but then tightened in 2024, as illustrated in Deutsche Bank's FCIs below. This has weighed on equity markets, local sovereign yields and local currencies.Weeks in reviewChina's annual Central Economic Work Conference (CEWC) was held on 11-12 December to discuss the country's economic work plan for 2024. Overall, assessment of the economy has turned brighter, and the policy tone strikes a balance between near-term and long-term goals. We expect an "above 4.5%" growth target for 2024, supported by proactive fiscal spending combined with a moderately accommodative monetary policy. The government also seeks to improve the coherence of "non-economic policies", further support the property sector through government-led projects, and take concrete steps to attract foreign visitors and investment. China's economic activity indicators reported high YoY growth in November, mostly owing to a low base last year. Sequential growth Juliana LeeChief Economist+65-6423-5203Kaushik DasChief Economist+91-22-7180 4909Yi Xiong, Ph.D.Chief Economist+852-2203 6139Deyun OuResearch AssociateDeutsche Bank AG/Hong KongIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.What you need to know: 8 - 12 JanDistributed on: 08/01/2024 23:03:07 GMT7T2se3r0Ot6kwoPa9 January 2024Asia Week AheadPage 2Deutsche Bank AG/Hong Ko...
