Goldman Sachs preview of key Asia ex-Japan macro data: China Q2 GDP may slow, Bank of Korea expected to hike by 25bp

Overview

This is Goldman Sachs' weekly Asia ex-Japan macroeconomic preview, covering economic data and policy events in China, South Korea, India, Singapore, Malaysia, and other economies over the coming week. Key focuses include China's Q2 GDP and June trade and activity data, the Bank of Korea meeting, India's CPI, and preliminary Q2 GDP data for Singapore and Malaysia.

Core views

The report expects China's Q2 growth to slow from 5.0% yoy in Q1 to 4.5% yoy, mainly due to the global energy supply shock, slower government spending, and adverse weather; the Bank of Korea is expected to hike by 25bp; inflation in India is expected to rebound; and Singapore and Malaysia's economic resilience is stronger than previously expected, supported by the AI-related upcycle, prompting upward revisions to their 2026 GDP forecasts.

Analysis framework

The analysis combines yoy and seasonally adjusted quarter-on-quarter indicators, working-day effects, high-frequency shipping and trade indicators, PMI, industry-channel research, energy-price assumptions, central-bank communication frameworks, and Bloomberg consensus estimates to forecast upcoming macroeconomic data and policy decisions.

Methodology notes

• Macroeconomic forecastingCombined yoy and seasonally adjusted qoq analysis

  Use yoy, seasonally adjusted qoq, and annualized qoq measures simultaneously to assess economic momentum.

  For example, the report provides a 5.0% yoy forecast for China's industrial production and derives 9.3% annualized seasonally adjusted qoq growth based on base effects, distinguishing between yoy base effects and genuine cyclical momentum.

• Policy analysisCentral-bank reaction function

  Assess the policy-rate path based on inflation, growth, financial stability, and market pricing.

  For the Bank of Korea, the report focuses on the MPC statement, the governor's press conference, clues from the future dot plot, export resilience, domestic-demand recovery, oil-price changes, housing prices, and USDKRW pressure.

• Market impactHigh-frequency event study

  Use intraday high-frequency data to assess the short-term impact of macroeconomic data on Asian financial markets.

  The report cites previous Goldman Sachs research indicating that high-attention indicators such as industrial production, GDP, trade, and inflation often trigger relatively consistent short-term market reactions.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China macro-related assets

  Affected by Q2 GDP, trade, industrial production, fixed-asset investment, and retail sales.

  Strengths

  Export growth, import growth, and industrial production are expected to improve.

  Weaknesses

  Fixed-asset investment, retail sales, and construction demand remain weak.

  Comparison

  Q2 real GDP is expected to be lower than in Q1, while annualized seasonally adjusted qoq growth is also expected to decline.

  Risks

  Global energy supply shocks, slower government spending, adverse weather, and weakening effects of consumer-support policies.

• South Korean rates and USDKRW

  Directly affected by the Bank of Korea's July meeting and subsequent policy guidance.

  Strengths

  Exports remain resilient, and the central bank has room to hike.

  Weaknesses

  The domestic-demand recovery is uneven, while financial-stability pressures are rising.

  Comparison

  The May dot plot was relatively dovish versus market pricing, but consistent with the Goldman Sachs forecast.

  Risks

  Further housing-price increases, elevated USDKRW, equity-market volatility, and deviations in policy communication.

• Indian inflation and rate expectations

  Affected by June CPI, food prices, and core inflation.

  Strengths

  Inflation remains within an analyzable range, with the forecast slightly above consensus.

  Weaknesses

  Food, fuel, and consumer-goods costs are pushing core inflation higher.

  Comparison

  Goldman Sachs forecasts 4.3% yoy, above the Bloomberg consensus of 4.2%.

  Risks

  Rising input costs and continued month-on-month increases in food prices.

• Singapore and Malaysia growth assets

  Affected by preliminary Q2 GDP data and the AI-driven industrial cycle.

  Strengths

  Industrial production and exports are strong, with the AI cycle offsetting part of external shocks.

  Weaknesses

  Yoy growth is slowing somewhat from Q1.

  Comparison

  Both countries' 2026 GDP forecasts were revised upward: Singapore from 3.0% to 4.3% and Malaysia from 4.2% to 4.5%.

  Risks

  The Middle East conflict, external-demand volatility, and a downturn in the technology cycle.

Key data

• China June export forecast20.0% yoyAbove 19.4% in May, supported by South Korea-China trade, high-frequency shipping data, and working-day effects.
• China June import forecast29.5% yoyAbove 27.4% in May, with the trade surplus expected at USD116.6bn.
• China Q2 real GDP forecast4.5% yoyBelow 5.0% in Q1; annualized seasonally adjusted qoq growth is expected to decline from 5.3% to 3.5%.
• China June industrial production forecast5.0% yoyA moderate recovery from 4.5% in May, supported by improved exports, a slower contraction in steel output, and the manufacturing PMI.
• China June fixed-asset investment forecast-8.3% yoyMonthly yoy growth remains weak, with year-to-date growth expected at -5.4%.
• China June retail sales forecast-0.1% yoyWeak passenger-vehicle retail volumes and appliance sales indicate a declining effect from the trade-in program for consumer goods.
• Bank of Korea policy-rate forecast2.75%A 25bp hike is expected at the July meeting, in line with the Bloomberg consensus at the time.
• India June CPI forecast4.3% yoyAbove May's level, with food prices and higher core-goods costs pushing inflation upward.
• Singapore preliminary Q2 GDP forecast5.2% yoyThe 2026 GDP forecast was revised upward from 3.0% to 4.3%.
• Malaysia June CPI forecast1.9% yoyBelow 2.0% in May; the 2026 CPI forecast was revised downward from 2.3% to 2.0%.
• Malaysia preliminary Q2 GDP forecast5.0% yoyThe 2026 GDP forecast was revised upward from 4.2% to 4.5%.

Impact & implications

For investors, the main drivers of volatility in Asia ex-Japan markets over the coming week are confirmation of slowing Chinese growth, the Bank of Korea's hiking path, inflation pressures in India, and the resilience of the ASEAN technology-manufacturing cycle. If China's data come in weaker than expected, China-demand-sensitive assets could face pressure; if the Bank of Korea signals a hawkish stance, volatility in the won and rate assets could rise; upward growth revisions for Singapore and Malaysia would reinforce the logic that the AI supply chain is supporting regional economies.

Risks

• Weak Chinese domestic demand persists longer than expected, weighing on fixed-asset investment and retail sales.
• Global energy prices and supply shocks disrupt the paths of inflation, PPI, and real growth.
• Divergence between the Bank of Korea's policy communication and market pricing triggers volatility in rates, foreign exchange, and equities.
• Indian food prices and core-goods prices continue to rise, causing inflation to exceed expectations.
• If the AI-driven export and industrial-production cycle turns down, the upward revisions to Singapore and Malaysia's growth may face downward-revision risk.
• Core inflation and underlying price pressures remain sticky in some economies, including the Philippines.

What to watch

• China's June trade data on July 14.
• China's Q2 GDP and June industrial production, fixed-asset investment, and retail sales on July 15.
• The Bank of Korea MPC meeting and the governor's post-meeting press conference on July 16.
• India's June CPI on July 13.
• Singapore's preliminary Q2 GDP on July 14.
• Malaysia's June CPI and preliminary Q2 GDP on July 17.
• High-impact data outside the region, including US and euro-area CPI, US retail sales, euro-area industrial production, and Japan's industrial production and machinery orders.