Analysts at Standard Chartered point out that China’s GDP growth moderated to 6.4% y/y in Q4-2018 from 6.5% in Q3 and 6.8% in H1, in line with market expectations, while full-year 2018 growth was 6.6%, versus 6.8% in 2017.
Key Quotes
“Consumption remained the dominant growth driver, contributing 76.2% of 2018 GDP growth, 18.6ppt higher than in 2017.”
“The economy is going through a soft phase, with continued headwinds from slowing growth in credit, industrial profit and housing sales. Export growth is likely to moderate in 2019 due to weaker external demand.”
“On the positive side, market confidence appears to be stabilising on the government’s reassurance to increase policy stimulus in 2019; improving prospects of easing US-China trade tensions; and a stronger Chinese yuan (CNY). Market-based reforms are probably needed to improve the long-term growth outlook.”
“With increased policy stimulus, we expect growth in China to bottom out in Q1-2019 at 6.3%, followed by a mild cyclical recovery in H2. We forecast GDP growth of 6.4% in 2019, above market consensus of 6.2%.”
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