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China's August data, India trade and inflation are key economic events this week

A torrent of data from China and India due this week will offer insights into the health of Asia's fastest-growing economies.


Dhiraj Singh | Bloomberg | Getty Images

India

Monday will be an India-centric day, with foreign trade, consumer price inflation (CPI) and industrial production on tap.

August exports and imports are expected to remain in contractionary territory after tanking an annual 6.8 and 19 percent, respectively, in the previous month. Analysts at Moody's estimate the August trade deficit at $7.1 billion, a slight narrowing from July's $7.76 billion deficit.

Growth in July industrial production could slip to 1.2 percent from an eight-month peak of 2.1 percent in June, HSBC said in a recent note. August CPI, meanwhile, is seen slowing dramatically from a 6 percent spike in July. HSBC predicts a 5.1 percent annual increase and Citi is betting on a 5 percent reading.

"After rising for four consecutive months, CPI inflation is likely to fall drastically in August, led by a steep fall in food prices. High frequency indicators that we track show that the price of vegetables (particularly tomatoes), fruits, pulses and oilseeds have each fallen over the last fortnight," HSBC said in a note.

Wholesale prices on the other hand, due on Wednesday, are seen climbing 4 percent in August, picking up from July's 3.5 percent rise, according to a Reuters poll.

China

China is expected to release its M2 money supply, fixed asset investment (FAI), industrial production, retail sales and foreign direct investment (FDI) for the month of August this week.

M2 money supply, a measure of all the money in an economy, including less liquid non-cash elements, due out on Monday, is seen growing 10.4 percent, Reuters estimated. That would reverse July's 10.2 percent tumble. New yuan loans, meanwhile, likely hit $112.32 billion, Reuters said.

Tuesday will see the bulk of data released.

Moody's and Reuters anticipate FAI for the first eight months of the year to expand 8 percent, which would mark the lowest pace of growth since 1999. Industrial production could rise 5.9 percent on-year, little changed from July's 6 percent expansion, Moody's indicated. Retail sales are expected to remain unchanged from July's 10.2 percent annual growth.

FDI, out Thursday, could hit $8 billion from July's $7.71 billion, Moody's said. But the gains would be temporary, the ratings agency cautioned.

"The overall trend remains flat," Moody's said. "Overcapacity in heavy industry, expectations of a lower yuan, and the steady deceleration in GDP growth are weighing on capital inflows."

Other reports to watch out for

Among the other highlights on Asia's economic calendar this week are New Zealand's second quarter gross domestic product (GDP) and Thailand's monetary policy decision.

The Kiwi economy is forecast to grow "a "bumper 1.2 percent on-quarter," according to National Australia Bank, a number that would be well above the central bank's expectations of a 0.8 percent boost.

The Bank of Thailand (BoT) meanwhile is expected to stay on hold amid a weak external environment.

"Recent comments from Governor Veerathai Santiprabhob continued to suggest a wait-and-see stance and a preference for maintaining policy space amid ongoing uncertainties in the global economy," HSBC explained.

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