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China looks to new policies to boost infrastructure spending

Activity data in May point to continued weakness in Chinese economic momentum, with growth in both fixed-asset investment and industrial production slowing last month. The only positive news came from retail sales, where growth picked up after the slump in April—but this rebound was probably due to seasonal effects. After taking into account special seasonality, […]

Weakening Japanese momentum behind strong GDP figures

The preliminary reading of Japanese GDP for Q1 shows that the economy grew by 2.1% q-o-q annualised, beating the consensus forecast of -0.2%. However, behind the strong headline figures, details of the GDP report reveal some broad-based weakening in momentum. Declining corporate capex and sluggish household consumption both drag on domestic demand. The seemingly strong […]

China growth moderates in April

Latest hard data indicate that China’s growth momentum moderated in April, after a strong Q1. Industrial activity, fixed investment and consumption all weakened in April. In the context of escalating trade tensions with the US, we expect the Chinese government to step up stimulus measures to support growth in the coming months, especially in the […]

China: Q1 growth beats expectations

The National Bureau of Statistics of China published Q1 GDP figures along with some key economic indicators for March. While we had previously flagged the upside risk to our earlier GDP forecast following the rebound in PMIs and strong credit numbers, the latest data releases still surprised to the upside. In light of the strong Q1 results and […]

China: strong credit growth in March again

Chinese credit data surprised on the upside in March, following a surge in January and a sharp fall in February. Monthly total social financing (TSF) came in at Rmb2.86 trillion, much stronger than the market consensus forecast of Rmb1.85 trillion. New bank loans also surprised on the upside at Rmb1.69 trillion, compared with the consensus forecast of […]

India: RBI cuts interest rate again

The Reserve Bank of India (RBI) cut its policy interest rate (RBI repo rate) by 25 basis points (bps) last week, bringing it down to 6.0%. This was the RBI’s second interest rate cut this year under its new governor Shaktikanta Das. With this move, the RBI has fully reversed last year’s rate hikes. Since the change of […]

China PMIs jump in March

Chinese PMI readings moved back into expansion territory in March. The official Chinese manufacturing PMI rose to 50.5, up from 49.2 in February, and beating the Bloomberg consensus of 49.6, while the Caixin manufacturing PMI came in at 50.8, also up from 49.9 in February and beating the consensus expectation of 50.0. Details of the PMI survey report generally point […]

Data remains soft in China

The latest economic indicators show that Chinese growth momentum remained soft in January and February, consistent with our expectations. Industrial activity was especially weak, weighed down by the mining and utility sectors. Growth in fixed asset investment improved slightly, mainly driven by the acceleration in property investment, but investment in the manufacturing sector declined. However, […]

More fiscal support as expected but no massive stimulus for China

The new economic targets for 2019 and policy announcements are broadly in line with our expectations. They generally reflect Chinese policymakers’ intention to support growth in the face of economic headwinds but to avoid massive stimulus. The target for real GDP growth for 2019 was lowered to a range of between 6.0% and 6.5%, from […]

After a slight rebound, Chinese business sentiment falls again

Chinese official manufacturing and non-manufacturing purchasing manager indices (PMI) fell again in February, following a pause in January. The manufacturing PMI came in at 49.2, down from 49.5 in the previous month. The non-manufacturing PMI, while continuing to signal expansion, also fell in February — to 54.3, from 54.7 the previous month. The data show […]

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