Central bank meetings

Bank Indonesia (BI) (Aug 20): In continuation of BI’s preference to be opportunistic in lowering rates during periods of market stability, we expect a second consecutive rate cut in August. This would take the benchmark rate to 5%, after a 25bp cut in July, when policymakers leaned towards a growth-supportive stance. External caution was negated by fresh news over the trade deal back then (Indonesia: Trade deal, BI cut, 2H outlook). Inflation is off lows to rise 2.4% YoY in July vs average 1.2% in 1H25, but still within the central bank’s target range. Meanwhile, the rupiah pared its post-Liberation Day weakness, and strengthened this week, tracking the weak dollar. With a subdued inflation profile, if rupiah retains its recent gains (IDR rallied to levels last seen in Dec24), the window for a cut will reopen this month.

Forthcoming data releases

Hong Kong SAR: Consumer prices are expected to rise 1.5% YoY in July, driven mainly by higher housing rents. Residential rental yields climbed to 2.96% in June from 2.64% a year earlier, while average asking rents in July rose 1.1% MoM. The rental market is projected to reach a record high by October, fuelled by an influx of Chinese students and professionals. Meanwhile, price declines in basic food, clothing, and durable goods are expected to narrow amid increased mainland visitor arrivals.

Japan: July trade and inflation data are due next week. Exports are expected to continue a modest decline of around -1% YoY, reflecting the impact of US automobile tariffs. Although the Japan-US trade deal reduced reciprocal and automobile tariffs to 15%, rates remain higher than pre-April levels, and export demand conditions are likely to weaken.

CPI inflation is expected to ease to 3% YoY in July. Imported inflation is declining, driven by lower oil prices and the diminishing impact of yen depreciation. Government subsidy programs—including gasoline, electricity and gas subsidies—have also helped lower domestic inflation.

Trade and inflation data suggest there is no urgency for the Bank of Japan to raise rates at the September 18–19 policy meeting.

Malaysia: We foresee modest goods export growth of 0.8% YoY in July 2025, rebounding from two consecutive months of contraction in May and June. This likely reflected the ebb and flow of orders front-loading, as the 90-day US reciprocal tariff pause approached its deadline. The US updated its tariffs on Malaysian imported goods to 25% in early July, before announcing a lower rate of 19% on August 1, changing from the 24% initially threatened on Liberation Day. We anticipate continued subdued headline inflation of 1.2% YoY in July 2025, compared to 1.1% YoY in June. Price pressures remained broadly contained, although there was likely a modest upside impact from the expanded Sales and Service Tax that came into effect from July 1.

Singapore: Singapore’s non-oil domestic exports (NODX) likely remained volatile in July 2025, amid an uncertain external landscape shaped by evolving tariff developments. We expect a NODX reversal to a contraction of 6.0% YoY, following the accelerated expansion of 13.0% YoY in June. This was partly attributable to adverse base effects in July compared to June for both electronics and non-electronics domestic products. The boost from front-loading of orders, which has been more apparent in re-exports data, has already tapered from its April peak. We will monitor whether July’s data portends the beginning of a weaker profile for Singapore’s exports in 2H.

Thailand: We foresee still-resilient Thai real GDP growth of 2.9% YoY in 2Q25, compared to 3.1% YoY in 1Q25. Growth was likely mainly supported by a pick-up in private investment, and strong goods exports due to orders front-loading during the 90-day US reciprocal tariff pause. However, the positive impact from net goods trade was weighed down by higher import growth, while overall growth momentum was held back by softer private consumption and foreign tourism.

Taiwan: July export orders are expected to show a moderate slowdown to around 15% YoY. The front-loading of trade ahead of reciprocal tariffs taking full effect in August may have already peaked. Some leading indicators are pointing to a softening in 3Q. The CIER manufacturing PMI dipped to 48 in July, weighed down by a sharp decline in new export orders to 41.9. Capital goods imports also decelerated notably to 23.6% YoY, suggesting manufacturers have become cautious with new capex plans. Despite signs of cooling momentum, our full-year GDP growth forecast remains unchanged at 4.0%, supported by strong gains in 1H.

Economics Team

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