Economists predict more China stimulus after weak factory and retail data




Economists predict more China stimulus after weak factory and retail data


Three key indicators released by China today all came in below market expectations, the latest set of weak data.
Industrial production – which measures output at factories, workshops and mines in the country – was at 6 percent year-on-year in July, the National Bureau of Statistics (NBS) said. It slowed from a 6.8 percent increase in June and was far below the median forecast for a 6.6 percent rise from 40 economists surveyed by Bloomberg News.


Economists said data pointed to further weakening in the economy.


“China July activity data came much weaker than we expected, indicating the growth momentum is losing steam again after a gentle rebound in Q2,'' Nomura economist Zhao Yang said in a note.

Retail sales, a key indicator of consumer spending, was up by 10.5 percent in July from a year earlier, the NBS said, just below a 10.6 percent forecast in the poll.

Fixed asset investment, a measure of government spending on infrastructure, expanded 11.2 percent on-year in the January-July period, the NBS said. This was also below an 11.5 percent median estimate, and the lowest since December 2000.

ANZ economists Liu Ligang and Louis Lam warned that economic growth could fall to below 6.5 percent in the third quarter.

“Thus we expect that more easing policies will be launched,'' they wrote in a note, predicting one more interest rate cut in the third quarter and a reduction in the amount of cash banks must keep in reserve, or the reserve requirement ratio.

Authorities have already reduced benchmark interest rates four times since November and have also lowered the RRR three times in a bid to stimulate the stalling economy.—AFP
Economists predict more China stimulus after weak factory and retail data Economists predict more China stimulus after weak factory and retail data Reviewed by Ajit Kumar on 3:24 PM Rating: 5

No comments:

Powered by Blogger.