- Global PMI is expected to ease in March as Middle East tensions begin to curb global activity.
- Higher oil prices are likely to lift CPI inflation across the Eurozone and Asia.
- South Korea’s exports should remain solid, supported by strong AI demand.
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Forthcoming data releases
China: Manufacturing PMI is expected to drop from 49 in February to 48.8 in March, due to slowed trade activities amid Middle East conflict. New exports order is expected to drag headline PMI. The deadweight ton of containerships in 20 major ports have dropped from 72mn tons per day in February to 68mn tons per day in March. High frequency data such as operating rate in major steel mills and electric furnace are also pointing to a slower recovery post-CNY holiday.
Indonesia: March inflation is expected to remain firm at 4% yoy, compared to 4.8% in the previous month, with a faster month-on-month pace than earlier averages, reflecting the initial impact of elevated energy prices and festival-driven price pressures. Base effects will also keep the trend firm. We highlighted in Indonesia: Spillover risks from the Middle East crisis that the authorities faced a few options in the face of high oil prices and delayed supplies. The most immediate line of defence would likely be to keep retail fuel prices unchanged, using budgetary savings to offset the higher costs. However, if the conflict persists and fuel prices remain elevated into the second quarter, the likelihood of price increases or subsidy reductions will rise.
South Korea: March trade and CPI data will be the key focus this week, marking the first set of economic releases following the outbreak of the Iran conflict. Export growth is expected to remain robust in double-digit territory and accelerate from Jan–Feb levels, supported by strong global demand for AI and data center infrastructure, rising memory chip prices, and ongoing supply shortages. This strength is likely to offset faster import growth driven by higher oil and LNG costs, resulting in a widening trade surplus in March.
On the inflation front, CPI is expected to remain above the 2% threshold and edge higher to around 2.3% yoy in March, reflecting the combined impact of rising global energy prices and the depreciation of the KRW.
In response, the government has introduced a series of measures to stabilize prices and mitigate the effects of the Iran conflict. These include implementing a fuel price cap, releasing strategic oil reserves, promoting energy-saving campaigns, and diversifying energy supply over the medium term. In addition, a supplementary budget of KRW 25 tn has been proposed and is scheduled to be submitted to parliament on March 31.
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