BoK Maintains Hawkish Stance as Inflation Slows; Singapore GDP to Show Modest Rebound

BoK likely to extend pause but stay hawkish

The Bank of Korea will have a rate decision meeting next Thursday. As inflation slows to the 2% range, the central bank is expected to keep its policy rate at the current 3.50% level. We think the BoK continues to remain hawkish in order to not give market participants a premature easing signal.

 

Singapore GDP growth to see slight bounce

Singapore’s second-quarter GDP is set for release next week. First quarter GDP showed the economy contracted from the previous quarter but still managed to eke out a 0.4%YoY gain. Singapore faces twin challenges of contracting exports and industrial production as global trade slows. One bright spot is retail sales, which have provided some support with the resurgence of visitor arrivals helping to offset softer demand caused by still high inflation. 

We expect second quarter GDP to bounce back into expansion, albeit a shallow one of 1.4%YoY with growth likely stuck in these ranges until global trade prospects improve.

 

Key events in Asia next week

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