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Korean consumer weakness, SBP to sound hawkish

Korea’s GDP figures published this week show that, although the economy held up relatively well last quarter, the recovery is becoming increasingly lobsided. Exports have been strong, but domestic demand, and in particular private consumption has been very subdued. High interest rates and falling real wages mean the weakness in private consumption is set to last a while longer yet.

Meanwhile, Pakistan’s central bank is likely to leave interest rates unchanged at its meeting on Monday, but we expect it to strike a hawkish tone amid worries about inflation and the fragile external position.

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