Asia week ahead: China trade figures, plus key data from South Korea and India

Next week’s economic calendar will be headlined by the release of CPI inflation and May trade data. Persistent deflationary pressures – driven by price competition and ongoing cost-cutting – have dragged the CPI inflation number lower in recent months, a trend expected to continue in May. We anticipate inflation to remain largely unchanged from April’s -0.1% year-on-year reading.

For trade, recent forecasts have been tinged with a higher-than-normal level of uncertainty amid tariff volatility. Markets are looking for export growth to moderate slightly to 6.3%, which would remain a respectable growth rate, broadly in line with the year-to-date growth. Imports are expected to remain in negative growth on the month. This slowdown of imports and resilience of exports has helped China's trade surplus expand further year to date.

The unemployment rate is expected to rise modestly to 2.8% in May (vs 2.7% in April), mainly due to the scaling down of the public work programme in 2Q25. We expect an increase in service jobs, partially offset by declines in manufacturing and construction. Ongoing restructuring in the construction sector and tariffs are expected to have a negative impact on employment.

First-quarter GDP revision data will be out. A modest upward revision is expected thanks to solid business investment. However, the economy is still expected to contract by -0.1% quarter-on-quarter, seasonally adjusted.

We expect the disinflation momentum to continue and CPI inflation to ease further to 3% in May as both food and fuel prices continue to edge lower.