Click here to read the full report

Central bank meetings

Bank of Korea (Jan 15): The BOK is highly likely to keep the base rate unchanged at 2.50% at this meeting, after signaling the end of its rate-cut cycle at the November meeting. Recent data suggest the economy has remained resilient despite US tariff challenges. Manufacturing PMI returned to the 50 threshold in December, while exports rebounded to double-digit growth. Strong AI-related demand continues to support Korea-made memory chips. Meanwhile, inflation appears to have bottomed out around 2%, reflecting KRW weakness and rising property prices. As a result, the rationale for further monetary easing has diminished. The next policy move is increasingly likely to be a rate hike, though this is unlikely in the near term as long as inflation and inflation expectations remain well anchored.

Forthcoming data releases

China: Exports growth is expected to moderate slightly from 5.9%yoy in November to 5.5% in December, mainly reflecting base effects from last year’s front-loading. Shipping activity, however, remains robust. Container ship deadweight tonnage across 20 major ports reached a record daily average of 1.60mn tons in December, up 22.7%yoy from a year earlier. Export momentum is also supported by improving orders, with the new export orders sub-PMI rising to a nine-month high of 49.0 and the SME-focused Caixin PMI returning to expansion territory. On the monetary side, credit demand remains subdued. New corporate and household medium- to long-term loans are expected to decline further amid cautious borrowing sentiment and continued early repayments. M2 growth is projected to hold at 8.0% in December, while the gap between M2 and M1 growth is likely to widen. Although partly reflecting a roughly 5% pullback in the A-shares market from its October peak, the widening gap also signals persistent hesitation among corporates and households to invest and spend.

India: Dec25 inflation numbers are likely to signal a further bottoming out in trend, rising to 1.5% y/y from 0.7% y/y month before, enroute the official 2-6% tolerance band. Sequential firmness in food and precious metals likely added to the lift in the month, besides seasonal pressure on services (ex housing). We note that this is the last reading under the older 2012 base, with January 2026’s print (out on February 12) to reflect the new 2024 base year. Under the existing base, hike in tobacco/ cigarette taxes, and gold, besides modest upside in food would have added to the upward momentum in 1Q26 (4QFY26), besides adverse base effects. For annual FY26, we see modest upside risks to our forecast at 1.8%, before the average moves up to 4% in FY27. The base year revision is expected to benchmark weights to the household consumption survey, besides including online platform services data to better represent service sector price pressures. Rebased GDP will be out towards late-Feb25 and IIP around the start of the new fiscal year. RBI policy committee lowered rates in Dec, along our expectations, but is expected to draw a pause when they meet next in February. Dec exports are set to be steady on nominal basis benefiting from gradual diversification flows, although base effects will keep yoy growth at sub-1%. Trade deficit is expected to remain around the levels witnessed in Nov at -$24bn.

Malaysia: Malaysia’s economy likely ended 2025 on an upbeat note, with our expectation for real GDP growth at 5.0% yoy in 4Q, compared to 5.2% yoy in 3Q, amidst broad-based resilience. The export-oriented manufacturing sector remained supported by resilient electrical & electronics exports, underpinned by artificial intelligence (AI)-related external demand and US tariff exemptions on electronics goods. Construction likely expanded robustly, albeit with some moderation in recent quarters, amidst a healthy project pipeline and investment momentum. Domestic services and demand remained supported by a favourable labour market and income-related policies.

Singapore: We expect Singapore’s non-oil domestic exports (NODX) to rise for the fourth consecutive month in December 2025, albeit at a moderate pace of 8.0% yoy compared to 11.6% yoy in November. Ongoing firm artificial AI-related external demand likely supported electronics domestic shipments, but high base effects from a year ago likely capped the expansion. Non-electronics domestic exports likely remained the key swing factor due to highly volatile pharmaceutical shipments, which could have pulled back in December from the sustainable spike of 300% yoy in November.

Economics Team

Click here to read the full report