Goldman Sachs Outlook for Asia ex Japan Macro Events Next Week: Focus on China’s May Activity Data and Three Central Bank Meetings

Overview

This weekly Asia ex Japan macro outlook from Goldman Sachs focuses on economic data and central bank meetings in the coming week. On China, the report focuses on May industrial production, fixed asset investment, and retail sales, arguing that exports support industrial production, while weather, the pace of government bond issuance, weak auto sales, and differences in the timing of the 618 shopping festival will weigh on investment and consumption. On policy, the report expects the central banks of Taiwan, Indonesia, and the Philippines all to face pressure to raise rates, and it also reviews recent events including China inflation and trade, India GDP, Taiwan exports, and Indonesia’s policy rate.

Core views

The core views include: first, China’s May economic activity may continue to show a divergence of stronger external demand and weaker domestic demand; second, Taiwan’s economy has grounds for a modest rate hike due to stronger tech exports, wages, inflation, and housing prices, although market consensus leans toward staying on hold; third, Indonesia needs further monetary tightening to attract portfolio inflows and stabilize the rupiah; fourth, although Philippine inflation has retreated from its peak, it remains above target, and second-round effects support further rate hikes; fifth, India’s Q1 growth was stronger than expected, but the energy shock may later weigh on demand.

Analysis framework

The report uses a macro event calendar and country-level forecasting framework, combining year-over-year growth, sequential annualized momentum, base effects, policy meeting frequency, market consensus, central bank reaction functions, and trade and inflation data for its assessment. It also cites prior research on the high-frequency reaction of Asian financial markets to economic data, noting that closely watched indicators such as industrial production, GDP, trade, and inflation are more sensitive in driving short-term market volatility.

Methodology notes

• Macro Calendar TrackingAsia ex Japan Economic Calendar

  Identify macro risk events in the coming week based on release dates and central bank meeting schedules.

  The report lists events one by one, including China activity data, Bank of Korea meeting minutes, the Taiwan central bank meeting, the Indonesia central bank meeting, the Philippines central bank meeting, and Malaysia CPI, while providing Goldman Sachs forecasts versus market consensus.

• Economic Data ForecastingYoY, Sequential Annualized, and Base Effect Decomposition

  Use YoY forecasts, sequential annualized momentum, and base effects to explain changes in economic activity.

  The China industrial production forecast not only provides 4.3% YoY growth, but also notes the equivalent of about +1.1% sequential annualized growth, and links YoY changes in retail, home appliances, electronics, and online sales to base effects and promotional timing.

• Monetary Policy AssessmentCentral Bank Reaction Function

  Judge the policy rate path based on inflation, wages, growth, exchange rates, capital flows, and asset prices.

  For Taiwan, the focus is on GDP, tech exports, wages, M2, and housing prices; for Indonesia, on the rupiah, SRBI yields, FX intervention, and DNDF maturities; for the Philippines, on inflation second-round effects and inflation expectations.

• Market Impact AssessmentHigh-Frequency Event Study

  Use intraday high-frequency data to measure the short-term impact of economic data releases on financial markets.

  The report mentions prior high-frequency research across ten Emerging Asia economies, arguing that closely watched indicators such as industrial production, GDP, trade, and inflation trigger relatively stable short-term market reactions.

Asset mapping & comparison

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

• China Macro Assets

  Affected by May industrial production, fixed asset investment, retail sales, trade data, and the pace of fiscal investment.

  Strengths

  Exports are stronger than expected, the trade surplus has widened, and the advancement of six major network-related investments and second-half fiscal deployment may support high-tech manufacturing, AI infrastructure, and strategic supply chains.

  Weaknesses

  Forecasts for fixed asset investment and retail sales remain negative, auto sales are weak, and weather and the pace of government bond issuance are dragging construction and investment.

  Comparison

  External demand and trade data are clearly stronger than domestic demand activity data, creating a structural divergence.

  Risks

  Global energy shocks, weaker-than-expected fiscal spending, timing misalignment of the 618 festival, and base effects may distort data interpretation.

• Taiwan Rates and TWD-Related Assets

  Affected by the CBC meeting, tech exports, inflation, wages, M2, and changes in housing prices.

  Strengths

  Strong tech exports, upgraded GDP forecasts, improved domestic demand growth, and stronger wages and M2.

  Weaknesses

  Inflation is above target and housing prices are rising rapidly, increasing pressure for policy tightening.

  Comparison

  Goldman Sachs expects a 12.5bp hike, while Bloomberg consensus at the time of writing leaned toward staying on hold.

  Risks

  The CBC may choose to stay on hold while pairing it with hawkish guidance, resulting in a policy path different from Goldman Sachs’ baseline forecast.

• Indonesia Rates and the Rupiah

  Affected by BI policy rates, SRBI yields, FX intervention, portfolio flows, and DNDF maturities.

  Strengths

  BI has already delivered an off-cycle rate hike and used measures such as higher SRBI yields to attract portfolio inflows.

  Weaknesses

  Previous rate hikes and FX intervention provided limited support to the rupiah, with USDIDR falling only about 1%.

  Comparison

  Goldman Sachs brought forward its rate hike expectation from Q3 to June, in line with Bloomberg consensus at 5.75%.

  Risks

  DNDF maturities may renew FX pressure, and if capital inflows remain insufficient, monetary policy may need to tighten further.

• Philippines Rate Assets

  Affected by the BSP meeting, CPI trajectory, and inflation expectations.

  Strengths

  CPI fell from 7.2% YoY in April to 6.8% in May, giving policymakers some room.

  Weaknesses

  Inflation remains above target, and second-round effects are still being transmitted through the economy.

  Comparison

  Both Goldman Sachs and Bloomberg consensus expect the BSP to hike 25bp to 4.75%.

  Risks

  If inflation expectations fail to remain anchored, the tightening cycle may be prolonged.

• India Macro Assets

  Affected by GDP growth, the investment cycle, consumption resilience, and energy price shocks.

  Strengths

  Q1 CY26 real GDP growth of 7.8% YoY beat expectations, investment growth reached a 4-year high, and services remained strong.

  Weaknesses

  Manufacturing contracted sequentially, and consumption growth slowed somewhat.

  Comparison

  Goldman Sachs raised its CY26 real GDP growth forecast to 6.5%, while maintaining its FY27 forecast at 6.1%.

  Risks

  An energy shock driven by Middle East conflict may suppress demand through fuel prices and drag on economic activity.

Key data

• China May Industrial Production Forecast+4.3% YoYHigher than April’s +4.1%, mainly supported by stronger-than-expected exports; equivalent to about +1.1% sequential annualized growth.
• China May Fixed Asset Investment Forecast-7.0% YoY for the month, -3.1% YoY YTDAn improvement from April’s -8.2% for the month, but still dragged by adverse weather and a slower pace of government bond issuance.
• China May Retail Sales Forecast-0.6% YoYLower than April’s +0.2%; weak auto sales, base effects, and the later start of the 618 shopping festival may weigh on online sales.
• Taiwan CBC Policy Rate Forecast12.5bp hike to 2.125%Goldman Sachs is more hawkish than market consensus; reasons include GDP upgrades, strong tech exports, inflation above target, and rising wages and housing prices.
• Indonesia BI Policy Rate Forecast25bp hike to 5.75%Goldman Sachs brought forward its previously expected Q3 rate hike to the June meeting, arguing it is needed to attract portfolio inflows and support the rupiah.
• Philippines BSP Policy Rate Forecast25bp hike to 4.75%May CPI fell to 6.8% YoY but remains above target, and the report argues that second-round effects are still being transmitted.
• Malaysia May CPI Forecast+2.0% YoYSlightly below Bloomberg consensus of +2.1%; MoM is expected to slow to +0.1% as unsubsidized fuel prices retreated from the April peak.
• China May Inflation and TradeCPI +1.2% YoY, PPI +3.9% YoY, exports +19.4% YoY, imports +27.5% YoYThe trade surplus widened to US$105.4bn; the PPI rebound was mainly driven by upstream industries such as chemicals, energy, and coal.
• India Q1 CY26 Real GDP+7.8% YoYAbove expectations, with investment growth hitting a 4-year high; Goldman Sachs raised its CY26 real GDP growth forecast by 30bp to 6.5%.
• Taiwan May Exports+9.4% MoM saRebounded from -8.8% in the previous month, with tech exports contributing nearly 90% of the MoM increase; the non-seasonally adjusted trade surplus widened to US$17.9bn.

Impact & implications

The report’s main investment implication points to short-term volatility in macro rates and FX markets rather than stock selection. If China’s data continue to show strong external demand and weak domestic demand, this may reinforce market focus on the pace of fiscal support and policy deployment in the second half; if Taiwan, Indonesia, and the Philippines hike as Goldman Sachs expects, it would reflect a still-tight policy environment in parts of Asia under inflation, FX, and capital flow constraints; the upward revision to India’s growth improves the fundamental narrative, but the energy shock remains a potential drag on subsequent demand and production.

Risks

• Global energy shocks may continue to weigh on chemical-related manufacturing output and suppress Indian demand through fuel prices.
• China’s May data may be jointly distorted by weather, the pace of government bond issuance, weak auto sales, base effects, and timing differences in the 618 shopping festival.
• If Taiwan’s CBC stays on hold but delivers hawkish guidance, it would differ from Goldman Sachs’ baseline forecast of a 12.5bp hike.
• Pressure on the rupiah, DNDF maturities, and insufficient portfolio inflows may force BI to maintain a tighter policy stance.
• If second-round inflation effects in the Philippines persist, the BSP may need to maintain tightening for longer.
• The report’s views are based on publicly available information, forecasts, and policy judgments at the time, and both data and central bank responses may change rapidly.

What to watch

• June 16: China fixed asset investment, retail sales, and industrial production data.
• June 16: Bank of Korea May MPC meeting minutes and its guidance on the rate hike path over the next six months.
• June 18: Policy meetings of Taiwan’s CBC, Indonesia’s BI, and the Philippines’ BSP.
• June 18: Malaysia May CPI.
• Progress in China’s six major network investments, the pace of government bond issuance, policy bank financing tools, and second-half fiscal spending deployment.
• Key events outside the region: US retail sales and the Fed meeting, Euro Area industrial production and CPI, Japan trade and CPI and the BOJ meeting, Australia’s RBA meeting, and New Zealand current account, GDP, and trade data.