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Kia ora.

Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from interest.co.nz.

Today we lead with news the US economy is starting to show signs of exhaustion - just as the Chinese economy looks like it can't actually transition to one where internal demand replaces their industrial exports engine, as they were planning.

But locally this week it will be all about how July retail sales turned out, and an update on our June population. And there will be a rush of earnings reports out this week from listed companies.

In Australia we will get their July labour market update, and both the August Westpac consumer confidence survey results, along with an update of inflation expectations.

Globally. t\e ongoing standstill between Iran and the US should continue to dictate energy prices and influence global interest rates. Rates will also take the spotlight with minutes from the last divisive meeting of the Federal Reserve, which included three dissents. More US data is expected to confirm their slowing economy.

In Japan there will be a raft of data updates for the world's fourth largest economy, including for GDP, exports, inflation, machinery orders and flash PMI data.

Indonesia and Sweden will review policy rates and settings this week.

In China, July data released this week will include industrial production, retail sales, house prices, fixed asset investment and their unemployment rate. The People’s Bank of China is also widely expected to leave its one- and five-year loan prime rates unchanged at 3% and 3.5%, respectively

This will come even though they have surprised with their bank lending actually contracting in July, only the third time ever this has happened and by far the largest retreat. Net new yuan loans fell by -¥340 bln in July when a weak no-change was expected (actually a minor +¥45 bln). July is often a lowish month for new bank lending but this latest data represents some real weaknesses. A slowing economy and poor consumer sentiment, particularly for housing, limited the demand for loans. About -¥460 bln of this fall was for consumer debt. But the swing also reflects the downturn for the traditional business sectors of the economy. Their tech sector commonly raises cash in the bond market instead of bank loans. So within this result there may be evidence of a structural shift.

Taiwan said its economic activity came in +12.9% higher in Q2-2026 from a year ago, lower than the +15.4% rise in Q1-2026.GDP. It was still the second-best growth pace they have recorded in almost 50 years.

Malaysia said its economic activity expanded +6.0% in Q2-2026, a rise from the +5.4% in Q1-2026 and better than the expected +5.7%.

In India, the bank lending impulse has the taps open fully, with lending up more than +19% at the end of July from the same point a year ago. This is a new modern record rise rate, and to record levels.<