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Central bank meetings

Bank Negara Malaysia (5 Mar): We expect Bank Negara Malaysia (BNM) to maintain its Overnight Policy Rate (OPR) at 2.75% at its March meeting, as the current monetary policy stance remains appropriate amid solid economic growth and contained inflation. The central bank anticipates resilient economic growth in 2026, following a strong 6.3% yoy expansion in 4Q25, driven by robust electrical & electronics exports amid global artificial intelligence-related tailwinds, as well as firm domestic demand underpinned by healthy household spending and continued investment momentum. Authorities also expect moderate inflation this year, helped by easing global cost conditions, while domestic policy reforms implemented in 2025 will exert only modest upside pressures on prices.

Forthcoming data releases

China: Manufacturing PMI is projected to edge down to 49.2 in February, largely reflecting Chinese New Year seasonality. During the nine-day holiday, nationwide domestic trips reached 596mn, up 18% yoy. The extended break likely weighed on factory operations and dampened manufacturing activity during the month.

Hong Kong SAR: Retail sales growth is projected to ease from 6.6% yoy in December 2025 to 4.1% in January 2026, reflecting Chinese New Year seasonality. Mainland visitor arrivals fell 2.1% yoy to 118k per day in January, while resident departures remained elevated at 329k per day, up 5.5% yoy. Meanwhile, prices of basic food, clothing & apparel, and durable goods declined 0.3%, 2.3% and 2.8% yoy, respectively, pointing to subdued consumer demand.

Taiwan: A set of economic data will be released this week following the Chinese New Year holiday. January export orders and industrial production are likely to post strong double-digit growth, driven partly by a low base effect from last year’s CNY holiday and partly by sustained expansion in global AI demand, as well as inventory restocking in the semiconductor and broader ICT sectors. February CPI inflation is expected to rise to above 1.5%, up from 0.7% in January, reflecting higher food and services prices during the CNY holiday period.

The national statistics agency has recently revised up its 2026 GDP growth forecast to 7.7% and slightly adjusted its 2026 CPI inflation forecast to 1.7%. These projections are broadly in line with DBS forecasts of 7.0% for GDP growth and 1.5% for CPI inflation.

South Korea: January industrial production is expected to register solid single-digit growth, supported by expanding semiconductor output amid sustained global AI demand and the resulting memory chip shortage. February CPI inflation is projected to edge up above 2% yoy, driven by higher food and services prices during the Lunar New Year holiday.

The Bank of Korea has recently revised up its 2026 GDP growth forecast to 2.0% and adjusted its 2026 CPI inflation forecast to 2.2%. These projections are close to DBS forecasts of 2.2% for GDP growth and 1.8% for CPI inflation.

Indonesia: Inflation in February likely rose to 4.1% y/y, largely reflecting a low base from the same period last year (Feb 2025: -0.1% y/y). The fading impact of one-off stimulus measures implemented in 1Q25 should also become evident in the administered price component, which had contracted sharply by 9% y/y a year earlier. While most components are expected to remain subdued, elevated precious metal prices are likely to filter into the personal care segment, leading to a double-digit increase for the fifth consecutive month. Trade data, due the same day, are expected to show the surplus remaining above $3bn. Recent developments, including a US court ruling, may result in a modest reduction in Indonesia’s effective tariff rate, boding well for export performance going forward.

Thailand: We expect Thailand’s headline inflation to remain negative for the 11th consecutive month in February at -0.5% yoy. This was mainly due to lower energy costs amid falling global oil prices, ongoing government relief measures, and a strong Thai baht. Core inflation remained subdued due to weak demand-pull pressures, while raw food price increases likely rose due to higher agricultural product prices. The Bank of Thailand continues to monitor deflation risks.

Vietnam: Vietnam’s economic data for February 2026 were likely volatile due to the Tet holidays. We expect goods export growth to ease to 17.5% yoy from the accelerated expansion of 29.7% yoy in January, largely due to high base effects, although underlying external demand remained supportive. Festive-related spending likely boosted retail sales growth, while headline inflation also rose to 3.0% yoy due to a rebound in food price increases and a low base.

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