Asian growth stays strong, with signs of a soft-landing

- Asian growth stays strong, with signs of a soft-landing "The key data releases over the past week were China and Singapore second quarter GDP. Markets generally reacted positively to signs of a soft-landing in China and continued robust growth in Singapore,
despite expectations of a weaker second half as global demand declines."
- China’s second quarter GDP growth eases… "Recent tightening measures appear to be working, as China’s Q2 GDP growth came in slightly lower-than expected at 10.3% y/y, in line with other slowing indicators such as industrial production, M2, retails sales, and fixed assets (see Highlight). Inflation for June came in much lower than expected (2.9% y/y), helping to ease concerns of overheating, and reducing the likelihood of additional tightening measures in
the near term. Other export-oriented economies in the region are still booming, such as Singapore which posted another quarter of rapid GDP growth (see Highlight). Both Singapore and Japan raised their official economic growth forecasts for 2010 to 13-15% (from 7-9%) and 2.6% (from 1.8%), respectively. India posted an inflation outturn of 10.55% in June, rising expectations of further interest rates hikes in the next monetary policy meeting scheduled on July 27th."
- …monetary tightening continues "As expected, Thailand raised its policy rate by 25bps to 1.50% last week, following similar moves in recent weeks by Korea, Malaysia, Taiwan, and India. On the other hand, Japan and Philippines remained on hold. Tightening measures reveal the region’s confidence in the growth outlook (see IMF Hightlight)."
- In the coming week…. "The coming week is relatively light on data releases. Markets will focus on June’s CPI inflation for Hong Kong, Singapore and Malaysia, and exports orders for June in Taiwan."
BBVA Asia Weekly Watch 20100719

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