>EMERGING ASIA: Falling inflation will provide a welcome boost

• We forecast that inflation should fall next year due to a combination of slowing growth and falling global commodity prices. However, inflation is likely to remain elevated in a number of countries, and will continue to be major policy concern in Vietnam and India. (See pages 2-3.)

• Falling inflation will provide a major boost to the region’s economies at a time when exports are expected to weaken. Not only will falling inflation give central banks room to cut interest rates but it will also boost consumers’ purchasing power.

• Central banks in Sri Lanka, Indonesia and Korea will announce their policy rate decisions this week. We expect them all to keep rates on hold as policymakers in the region are becoming increasingly concerned about the outlook for the world economy.

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• Sri Lanka Policy Rate (Mon. 10th Oct.) – Rates to remain on hold
• Indonesia Policy Rate (Tue. 11th Oct.) – Still in wait-and-see mode
• Korea Policy Rate (Thu. 13th Oct.) – Fears for global growth to keep rates on hold
• Singapore GDP (Q3) (Fri. 14th Oct.) – A return to growth