China: Stabilisation expected on policy stimulus – Standard Chartered

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Standard Chartered analysts suggest that their China’s nowcasting model points to GDP growth of 6.2% y/y in the first two months of Q1-2019, easing from 6.4% in Q4-2018.

Key Quotes

“Our monthly growth tracker confirmed the weak momentum in January-February. Industrial production growth slid to an average of 5.4% y/y in January- February from 5.7% in Q4-2018, partly due to negative seasonal and destocking effects. While real-estate investment picked up, land area purchased dropped significantly, and both floor space started and sold data deteriorated at the start of the year. Trade data turned weaker on softer global demand and tariff effects.”

“Meanwhile, domestic demand – as measured by retail sales and fixed asset investment growth in real terms – improved in January-February. Fiscal spending accelerated in the first two months of the year. Our SMEI suggests the outlook for SMEs remained strong at the beginning of the year. We expect growth to bottom out in Q1-2019 at 6.3%, followed by a mild cyclical recovery in H2.”

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