Consumers are under immense pressure given that the average mortgage repayment in the country is now A$15,000, or around $9,900, higher per year than what it was when interest rates were cut to emergency lows during the Covid-19 pandemic.
The biggest cost-of-living surge in 40 years has also put a big dent in household disposable incomes, so data on spending is critical, and will help to shape views about the next move by the Reserve Bank of Australia.
So too will monthly inflation data for April due on Wednesday.
The RBA has said it remains alert to inflation risks, and increasingly economists are forecasting a cut in the official cash rate will be delayed until 2025.
On Thursday, the RBA's chief economist Sarah Hunter, who shapes the central bank's economic forecasts, will participate in what is being billed as a fireside chat at the Australasian Investor Relations Association Annual Conference, Sydney.
With the RBA saying earlier this month that it remains highly uncertain about economic conditions and can't rule in or rule out anything in terms of the outlook for interest rates, Hunter's comments could be what determines the direction of government bond yields at the end of the week.
NEW ZEALAND
On Thursday, the New Zealand government presents its budget.
The announcement comes after the Reserve Bank of New Zealand signaled that interest rates might need to remain restrictive for longer than expected due to stubborn inflation.
Most economists are sticking with the idea that the central bank will be able to start cutting the official cash rate by the end of this year, not late 2025 as the RBNZ's forecasts imply.
The RBNZ projections do not incorporate the coming budget, Nomura economists Andrew Ticehurst and David Seif said. They expect the budget to be net-contractionary, which could influence future RBNZ thinking.
INDIA
India reports growth figures on May 31, which are widely expected to show that the economy continues powering on, albeit at a slightly slower pace.
High-frequency data suggest the economy remains resilient, DBS senior economist Radhika Rao said.
Rural demand continued to catch up in the final quarter of the fiscal year, and business sentiment has held up, she said. Government spending picked up ahead of the elections and corporate India registered a notable increase in revenue growth. Exports have outpaced imports, helping to nearly halve the trade deficit and effectively lowering the drag on headline growth, Rao said.
DBS pegs real GDP growth at 7.0% on the year, taking the full-year growth for fiscal 2024 closer to 8%.
Barclays economists also think GDP growth came in at 7.0% in the final quarter, slowing from 8.4% in the previous quarter, as economic activity moderates from elevated levels.
"That said, we continue to think that net taxes may push GDP growth higher once again, similar to Q3, and think risks to our forecast are to the upside," Jian Chang and Brian Tan said.
SOUTH KOREA
South Korea reports industrial production figures for April on May 31, followed by trade data for May.
The data will be watched to see if exports from Asia's fourth-largest economy managed to record an eighth straight month of growth. South Korea's central bank raised its 2024 economic growth forecast at its meeting in May, after stronger-than-expected expansion in the first quarter of the year.
Exports have been a key driver for the economy. The momentum in South Korean exports--often viewed as a bellwether for global trade--has been largely driven by brisk demand for powerful memory chips amid the artificial intelligence boom.
While data showed that exports in the first 20 days of May slowed from April, that was mostly due to fewer working days during the month, Barclays economist Bum Ki Son said
"We believe underlying momentum is steady and expect the tech recovery to continue through 2H 2024 as volume growth remains strong," he said.
Barclays also expects industrial production growth to pick up to 6.0% on year from 0.7% in March.
(All references to days for Asian events are in local times.)
- Additional reporting by Ronnie Harui, James Glynn, Megumi Fujikawa, Kwanwoo Jun, Emese Bartha, Miriam Mukuru and Dominic Chopping
Write to: Jessica Fleetham at jessica.fleetham@wsj.com and Fabiana Negrin Ochoa at fabiana.negrinochoa@dowjones.com
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05-24-24 0905ET
