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Tag: GDP

  • China’s Q2 GDP growth seen easing to around 6.7 percent

    China’s Q2 GDP growth seen easing to around 6.7 percent

    China’s economy will likely expand around 6.7 per cent in the second quarter this year, the State Information Center (SIC) said in an article in the state-owned China Securities Journal on Saturday.

    The forecast was slightly slower than the 6.8 per cent expansion posted in the first quarter. The SIC is an official think tank affiliated with the National Development and Reform Commission, the country’s top economic planning agency.

    April activity data released earlier this week suggested that the world’s second-largest economy is starting to lose some momentum, as analysts have long predicted, as the government continues a crackdown on riskier types of financing.

    While still expanding at a good clip, retail sales and fixed asset investment grew more modestly than expected while property sales fell for the first time in six months in the face of continued government curbs on speculation and rising mortgage rates.

    The lone bright spot was a rebound in industrial output, though the outlook for exporters is being clouded by trade frictions with the United States.

    Despite stronger-than-expected first-quarter growth, economists still expect a gradual slowdown to around 6.5 per cent this year, which is also the government’s target, assuming there are no trade shocks.

    The official think tank expects dollar-denominated exports to grow around 8 per cent in the second quarter versus a year earlier and imports to rise about 10 per cent.

    It forecast consumer inflation of around 2 per cent and expected producer price inflation would pick-up to about 3.8 per cent in the second quarter from a year earlier.

    The think tank suggested the government “maintain flexibility in macro economic policy and actively deal with trade frictions between the United States and China … to ensure a steady and healthy development of the country’s broader economy.”

    In the same article, the SIC said it expects China’s industrial output to grow about 6.6 per cent in April-June from a year earlier, with fixed-asset investment growth of around 7.2 per cent and retail sales seen rising about 10 per cent.

    China’s statistics bureau said this week that steady economic growth in April made a good foundation for achieving the full-year growth target.

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  • With Fastest Growth in Four Years, Indonesia Enters Trillion Dollar Club

    With Fastest Growth in Four Years, Indonesia Enters Trillion Dollar Club

    Indonesia’s full-year gross domestic product growth last year accelerated at the fasted pace in four years, as robust exports and investment growth compensate for weak household consumption, the Central Statistics Agency, or BPS, revealed on Monday (05/02).

    The agency said the economic growth rate was 5.07 percent, the highest since 2014. In 2015, the economy grew only 4.88 percent, while in 2016 at a 5.03 percent rate.

    Indonesia’s nominal gross domestic product was Rp 13,558 trillion, or $1 trillion at the 2017 exchange rate. This places Indonesia in a group of countries with economies above $1 trillion, like Australia, South Korea and India.

    Coordinating Economics Minister Darmin Nasution said he is optimistic this year’s economic growth rate will meet the government’s target of 5.4 percent, as he expects domestic consumption to rise with the upcoming regional elections and the Asian Games in August.

    “[We are] still optimistic … As long as we maintain the investment and exports,” Darmin said.

    Darmin needed to put economic growth in a more positive light, as the 5.2 percent target from the revised 2017 state budget was missed, because consumers withheld spending.

    “The top 20 percent of consumers tended to postpone their spending. There were concerns about politics and aggressive tax policies. Meanwhile, the lowest 40 percent were hit by rising food prices,” said Bhima Yudhistira Adinegara, an economist at the Institute for Development of Economics and Finance (Indef).

    “The key now is in recovering the confidence of the upper class and ensuring timely disbursement of social aid,” Bhima said.

    Gundy Cahyadi, a Singapore-based economist at DBS, said infrastructure projects are expected to continue supporting economic growth in 2018.

    “And if commodity prices are to remain at current levels, we expect investment growth to be more broadly based this year, with possibly positive spillover impact to household consumption,” Gundy said, adding that he expects Indonesian economy to expand by 5.3 percent in 2018.

    In 2017, Indonesia posted a five-year high of $11.84 billion trade surplus, thanks to the recovering global economy and rising commodity prices, with an increase in exports and imports — 9.09 percent and 8.06 percent, respectively.

    Foreign direct investment grew 8.5 percent last year from the previous year.

    “Trade and investments increased, but [household] consumption was still at 4.95 percent. If we want the economy to grow above 6 percent, these three components have to go hand in hand,” BPS head Suhariyanto told reporters.g

  • China’s 2017 GDP growth could reach 6.9%

    China’s 2017 GDP growth could reach 6.9%

    China’s GDP growth for 2017 may stay at 6.9 per cent, thanks to favourable internal and external conditions.

    China’s GDP growth for 2017 may stay at 6.9 per cent, thanks to favourable internal and external conditions despite the cool-off in the real estate sector and ongoing environmental protection measures, economists said.

    Xu Hongcai, an economist with the China Centre for International Economic Exchanges, said China’s year-on-year GDP growth for 2017 could be a higher-than-expected 6.9 per cent.

    The world’s second-largest economy expanded by 6.9 per cent in the first three quarters of 2017, which is above the government’s preset growth target of 6.5 per cent.

    Foreign trade recovered last year, consumption demand remained steady and high-tech sectors became stronger, contributing to the high growth rate, Xu said. Foreign trade rose 14.2 per cent year-on-year in 2017, reversing a two-year declining trend, according to the General Administration of Customs’ latest data.

    Zhu Baoliang, chief economist of the State Information Centre, said the stable GDP can be attributable to the country’s macroeconomic regulation since 2015, which had led to stable infrastructure and real estate investment to bolster growth. He said the supply-side structural reform had reduced production capacities and pushed up industrial goods prices, leading to surging corporate profits.

    Moreover, China had made much headway in economic restructuring, which has given rise to some new products, technologies and sectors. And the improving global economy has boosted China’s export growth, he added.

    Investment bank Goldman Sachs forecast that China’s GDP growth for 2017 could hit 6.8 per cent. “Economically, growth moved higher (than for 2016’s 6.7 per cent), reflecting better external conditions and the fruits of past policy changes,” it said in its latest report.

    The report said China has also managed to make some regulatory achievements to control financial risks. “Broad credit growth slowed from a pace of more than 20 per cent to the low tens on a clampdown on shadow banking activity. In asset markets, policymakers reined in surging house prices, stabilised the currency after a volatile 2015-16, and oversaw a steady equity rally,” the report said.

    The National Bureau of Statistics is scheduled to release the country’s key economic data, including whole year GDP growth, industrial output, fixed asset investment, and retail sales, on Thursday.

    Premier Li Keqiang said last week at the Lancang-Mekong Cooperation Leaders’ Meeting that China’s GDP growth for 2017 is “around 6.9 per cent”. China had maintained the trend of stable and improving growth in 2017, he said. Ning Jizhe, head of the NBS, said at a forum held on Saturday that the Chinese economy “showed sound momentum last year and did better than expected”.

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  • Singapore Upgrades 2017 Growth Forecast to as Much as 3.5%

    Singapore Upgrades 2017 Growth Forecast to as Much as 3.5%

    Singapore raised its economic growth forecast for this year to 3 percent to 3.5 percent after third-quarter data beat projections on the back of stronger exports and manufacturing.

    Highlights of GDP Report
    • Gross domestic product rose at a seasonally adjusted, annualized rate of 8.8 percent in the third quarter from the previous three months, higher than an earlier estimate of 6.3 percent
    • Median estimate of nine economists in a Bloomberg survey was for 7.8 percent gain
    • GDP increased 5.2 percent from year earlier, the fastest pace in more than three years, versus median estimate of 5 percent
    • Economy seen expanding 1.5-3.5 percent next yearPrime Minister Lee Hsien Loong

    A healing in global trade this year has helped boost export-reliant economies like Singapore’s, with manufacturing buoyed by demand for electronics goods. Growth has started to broaden out to other industries, such as services, giving economists and the government reason to upgrade their full-year projections. said earlier this week that growth could exceed 3 percent in 2017.

    The trade ministry said on Thursday global growth is expected to improve next year, on the back of a pick-up in the U.S. and some emerging markets.

    “We also see signs that the recovery is broadening,” with business services and retail looking better even though third-quarter growth was “primarily supported by manufacturing,” Loh Khum Yean, permanent secretary at the trade ministry, told reporters.

    Manufacturing surged almost 35 percent in the third quarter from the previous three months, while the services industry, which makes up about two-thirds of economy, grew an annualized 3.2 percent. Construction continued to suffer, contracting for a third quarter by 5.3 percent.

    Southeast Asia Boom

    Growth has been surprisingly strong across Southeast Asia, with third-quarter data from the Philippines and Malaysia last week and Thailand this week exceeding forecasts, providing a more upbeat tone to the region as the U.S. Federal Reserve tightens monetary policy.

    Jacqueline Loh, deputy managing director at Singapore’s central bank, told reporters the monetary policy stance from October remains appropriate and the regulator will continue to monitor developments. The Monetary Authority of Singapore left its policy stance unchanged last month, but gave itself room to tighten if necessary.

    In a separate report, International Enterprise Singapore forecast export growth of 6.5-7 percent for this year, compared with a previous estimate of 5-6 percent, and estimated 0-2 percent expansion next year.

    “The pace of growth of the Singapore economy is expected to moderate in 2018 as compared to 2017, but remain firm,” the trade ministry said.

    — With assistance by Myungshin Cho, and Ailing Tan

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  • Mobile contributed 6.2% to Bangladesh GDP in 2015

    Mobile contributed 6.2% to Bangladesh GDP in 2015

    Mobile technologies and services generated 6.2% of the GDP of Bangladesh in 2015, a contribution that amounted to around $13 billion of economic value, according to GSMA Intelligence.

    In the same year, mobile operators and the ecosystem provided employment to more than 760,000 people across Bangladesh, the report further stated. One-third of this was created directly in the ecosystem, while the rest is generated indirectly in other sectors as a result of the demand for production inputs generated by the mobile sector.

    “GSMA Intelligence findings clearly demonstrate the substantial contribution that mobile makes to the Bangladeshi economy,” GSMA head of spectrum Brett Tarnutzer said.

    “By systematically pursuing a policy framework that increases certainty, acknowledges market realities and removes regulatory barriers to investment and innovation, the Bangladeshi government and its citizens stand to achieve so much in the coming years.”

    In terms of public contribution, the mobile ecosystem generated about 10% of the government’s revenue in 2015, valued at $2.42 billion through general taxation, mobile-specific taxes, and spectrum licenses.

    Mobile’s overall impact includes the direct impact of the mobile ecosystem as well as the indirect impact and the increase in productivity brought about by the use of mobile technologies.

    GSMA added that Bangladesh performs close to the regional averages across metrics of mobile market development, despite a lower income than neighboring countries. Bangladesh is above the Asian average in terms of unique subscriber market penetration at 53%, while only slightly below with regard to mobile internet penetration at 33% and 3G at 20% of all mobile connections.

    Thus, it sees the potential for further growth if a supportive policy environment is put in place.

    GSMA Intelligence expects that the economic contribution of the mobile industry in Bangladesh will continue to increase. In value-added terms, it is estimated that the ecosystem will generate $17 billion by 2020. This forecast relies on a favorable macroeconomic environment and on a moderate expansion in demand and supply in the mobile market, as the number of mobile internet users and mobile coverage both increase.

    Employment opportunities are also set to expand from 780,000 jobs in 2016 to 850,000 jobs in 2020, an increase of around nine percent during that period.

    The amount of spectrum, and the terms on which it is made available, fundamentally drive the cost, range, and availability of mobile services. To ensure that this mobile vision becomes a reality, it is imperative that the spectrum is allocated in a way that encourages the rapid deployment of mobile broadband infrastructure, resulting in high quality, affordable mobile services for consumers across Bangladesh,” added Tarnutzer.

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  • Why obsessing over GDP is no longer in China’s best interests

    Why obsessing over GDP is no longer in China’s best interests

    China’s leadership has always seen gross domestic product (GDP) numbers as the most important indicator of their ability of govern; thus their whole apparatus does whatever it can, in terms of policies, to make sure a politically acceptable growth rate is achieved.

    With a persistent slowdown, the government has to adjust its target to a maximised but achievable goal. Between 2010 and 2015, the world’s second-largest economy witnessed a steady slowdown, with annual percentage growth rates of 10.5, 9.5, 7.9, 7.8, 7.3 and 6.9, respectively. Averaged annual GDP growth rates between 1989 and 2009 were around 10 per cent.

    Last year, the government set a range of 6.5 per cent to 7 per cent as a growth target, the lowest in decades. As expected, China is on track to meet that 2016 goal after three straight quarters of 6.7 per cent expansion.

    However, such growth was achieved with an expansive fiscal policy, higher government spending, a housing rally, ultra-loose monetary conditions and record bank lending, which have also led to an explosive increase in debt.

    Government spending from January to September 2016 was 12.5 per cent up on the same period a year earlier, while revenues increased by 5.9 per cent. Of the 8.2 per cent overall growth in fixed-asset investment in the period, state firms jumped by 21.1 per cent and private firms rose 2.5 per cent.

    In the previous year, state firms registered a much more moderate 10.9 per cent in fixed-asset investment, year on year, while private investment went up by 10.1 per cent.

    Recent growth has been achieved with the help of record bank lending, which is on pace to top 2015’s record 11.71 trillion yuan (HK$12.2 trillion). Last year, the central bank injected a net 1.5 trillion yuan into money markets through open market operations, many multiples of its net 10 billion yuan injection in 2015.

    The eased monetary policy helped stoke a housing boom that saw prices rise to a historic 12.6 per cent year on year in November and made houses in Chinese cities among the least affordable in the world.

    The state investment-fuelled growth led to alarming combined public and private debt of 260 per cent of GDP by the end of last year, the highest debt-to-GDP ratio in the world. The Bank for International Settlements (BIS) recently warned this was excessive and dangerous. In the first six months of last year, China’s domestic debt ratio rose by an astonishing 28 per cent of GDP.

    Last year the party set a target of 6.5 per cent annual growth for five years through to 2020, in its 13th five-year plan, just to meet the leadership’s promise of doubling the country’s economic size and per capita income from 2010 to 2020, a political symbol of building a “moderately prosperous society”.

    To support such short-term growth, the government had to delay, stall or even hold back some sorely needed reform measures which will help regain long-term growth momentum.

    Realising the challenge of taming asset bubbles, solving rising bad debt and checking unbalanced growth, the leadership recently pledged to shift its focus away from growth towards dealing with risks this year.

    If the leadership makes good on what they claimed – giving market forces a decisive role in the distribution of resources – they should abandon arbitrary growth targets, a remnant a Stalinist command economy.

    China’s economy is going through a critical transition, from manufacturing-oriented and state investment-fuelled expansion to service-centred and consumption-driven growth. What the government should do is push forward reforms that remove the obstacles to such transitions. ■

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  • South Korea Q3 GDP slows slightly, but better than forecast

    South Korea Q3 GDP slows slightly, but better than forecast

    The seasonally adjusted reading, down from a 0.8 percent gain in the second quarter, compared with a median 0.6 percent rise tipped in a Reuters survey.

    It also showed that facility investments fell 0.1 percent on-quarter in the July-September period, compared with a 2.8 percent on-quarter expansion three months earlier. On a sequential basis, the real GDP expanded 0.7 percent, slightly slower than the 0.8 percent growth recorded in the prior quarter.

    Despite the beat on both quarterly and year-on-year GDP, the Bank of Korea suggests growth could have been even better, citing troubles atelectronics giant Samsung following the release, then recall, of the Galaxy Note 7, along with industrial action at Hyundai.

    Services rose 1.0 percent in the September quarter from the previous three-month period, also better than a 0.6 percent gain in the second quarter, most likely thanks to government efforts to launch nationwide retail sale events to pry open wallets. On the other hand, exports grew 0.8 percent with rises in exports of chemical products and semiconductors. Capital investment slipped 0.1 percent, down from 2.8 percent growth in the previous quarter.

    Government consumption grew by 1.4%, in part due to an increase in health insurance benefits.

    It left the year-on-year expansion at 2.7%, down on the 3.3% rate reported in the previous quarter.

    A BOK official remained hopeful about Korea’s outlook, saying it could achieve 2.7 percent annual growth this year, as long as the economy does not contract any further.

    Both Chung and the ministry official agreed that fourth quarter growth would also be affected by Samsung’s decision to discontinue production of its fire-prone Galaxy Note 7 smartphone, although the economic impact from lost manufacturing was almost all reflected in the third quarter.

    Construction rose 4.4 percent sequentially, driven by a growth in building construction. LGERI projects 2.2 percent growth next year.

    “With China and European Union also likely to slow, Korea faces hard external conditions”, he said.

  • Here’s why Singapore can depend on F&B industry for economic growth

    Here’s why Singapore can depend on F&B industry for economic growth

    It contributes $14.4b to the city-state’s GDP.

    The food industry has done more than relieving hunger as it has also made huge impact in the overall economic growth of Singapore, contributing a bulk to the city-state’s GDP.

    According to the Food Industry Asia report by the Oxford Economics, F&B industry contributes an estimated $14.4 billion to GDP and employs nearly 300,000 people.

    The study revealed that overall impact of the food industry is dominated by food distribution.

    “The wholesale and retail of food, along with activities linked to Singapore’s 6,700 food service locations (which include restaurants, coffee shops and street hawker stands) account for two-thirds of the food industry’s GDP contribution, and four-fifths of the employment it supports,” the study said.

    Meanwhile, the food manufacturing industry has also made a huge impact on Singapore’s GDP, with its direct support for 38,800 jobs.

    In 2014, the food manufacturing industry earned S$9.8 billion from sales in Singapore.

    More so, food manufacturers’ supply chain spending within Singapore supported $1.6 billion of domestic procurement, $610 million of GDP, 6,100 jobs, $31 million in tax revenues, and S$37 million in Central Provident Fund contributions in the same year.

    “Based on the report’s findings, the food manufacturing industry is equivalent in size to Singapore’s aerospace industry, and larger than industries such as speciality chemicals, petrochemicals, medical technology and land transport engineering,” the study noted.
     

  • Philippine GDP growth surpasses China

    Philippine GDP growth surpasses China

    The Philippines has surpassed China in terms of GDP growth, for the first time in three decades, making the country the best performer in Asia* in Q1 2016.

    From 5 per cent in Q1 2015, Philippine GDP surged by 6.9 per cent in Q1 2016, the highest since the second quarter of 2013, said the National Economic and Development Authority.

    Philippine GDP growth outpaced China’s 6.7 per cent, Vietnam’s 5.5 per cent, Indonesia’s 4.9 per cent, Malaysia’s 4.2 per cent, Thailand’s 3.2 per cent, and Singapore’s 1.8 per cent economic growth in the quarter.

    Luisito Abueg, economics professor from De La Salle University Manila, said many factors contributed to the Philippines’ growth.

    “GDP may have been record high, but we have to account for the increased consumption component due to elections spending. It has been documented that during election periods, consumption increases, and with more created temporary jobs, more income circulates in the market,” said Abueg.

    Abueg said credits should not only go to the Aquino administration. “Some underlying components of growth may have been realized today, but the work of previous administrations are just now bearing fruit – the so called ‘lagged effects’ in economics and statistics.

    “That is why it is important that we should always have continuity: to continue the good, and to correct the bad. Not just to change everything just for the sake of credit-grabbing, which is a usual problem in Philippine politics, affecting economic directions.”

    Recently, Robinsons Retail, Jollibee, 7-Eleven and other retail companies reported profit growth for Q1 2016 citing election-related spending among other factors.

    With the country’s population projected to have reached 102.6 million in the first quarter of 2016, per capita GDP grew by 5.2 per cent from 3.2 per cent in the same quarter of 2015. Per capita household spending grew by 5.3 per cent from last year’s growth of 4.3 per cent, reported the Philippine Statistics Authority.

    The PSA said main growth driver was the services sector, which accelerated to 7.9 per cent from 5.5 per cent, while industry grew 8.7 percent from 5.3 per cent last year.

    On the other hand, the agriculture sector declined by 4.4 per cent, the fourth consecutive quarterly decline, from a growth of 1 per cent in the first quarter of 2015.

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  • Hong Kongs economic growth decelerates in Q1, risks to growth remain on downside in near term

    Hong Kongs economic growth decelerates in Q1, risks to growth remain on downside in near term

    Hong Kong registered GDP growth of 0.8% y/y in the first quarter of 2016, lower than consensus forecast. However, in quarter-on-quarter terms, the economic growth shrank 0.4%, as compared with 0.2% growth registered in the fourth quarter of 2015. The first quarter’s report suggests that the Hong Kong economy expanded at its slowest pace since 2012. The country’s trade performance is being quite impacted by the weak global demand. Hong Kong’s imports and exports both contracted sharply.

    Services exports weakened amid the deceleration of tourist arrivals and subdued spending by visitor. Hong Kong’s retail performance has been weighed on by major declines in tourist arrivals along with the relative strength of the HKD. Hong Kong’s retail sales continue to be in contraction for more than a year.

    The volatility in the global financial market has also impacted the country’s economic confidence and has been a drag on domestic demand. Private consumption expenditure grew marginally 1.1% y/y in the first quarter of 2016, as compared with the growth of 2.7% registered in the fourth quarter of 2015. Meanwhile, the property market weakened as transactions eased and prices fell.

    Hong Kong’s investment growth subtracted 2.3 percentage points from the headline GDP growth. It dropped 10.1% y/y, as compared to a contraction of 9.4% y/y in the previous quarter. Even if the relief measures stated in the 2016-2017 budget will give certain support to the economy, the risks to the economic growth continue to be tilted on the downside in the near term, noted HSBC in a research report.

    The economic growth is expected to be helped by the rapid growth in the US and stabilization in the Mainland economy in the coming quarter. The Hong Kong government has retained its growth and inflation forecast for 2016. It projects the economy to expand between 1% and 2%, whereas consumer price inflation is likely to be 2.3% this year.

    “We forecast overall GDP growth to slow to 1.5% in 2016, down from 2.4% in 2015”, added HSBC.

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  • China first quarter GDP growth slowest since 2009

    China first quarter GDP growth slowest since 2009

    The pace of China’s economic growth decreased to its lowest since the global financial crisis in the January to March period, official figures show. Gross domestic product expanded 6.7% from the same period a year ago, in line with market expectations but the slowest pace of growth recorded since the first quarter of 2009.

    The world’s second largest economy grew 6.9% last year – its weakest expansion in a quarter century – falling short of Beijing’s target of 7%. But the first quarter number falls within the range of Beijing’s growth target of 6.5% to 7% for 2016.

    Other data for March released by the National Bureau of Statistics suggested that the Chinese economy was stabilising, with industrial output, retail sales and urban fixed-asset investment all beating analyst forecasts.

    Industrial production rose 6.8% from a year earlier following a 5.4% increase in January-February, while retail sales jumped 10.5%. Fixed-asset investment expanded 10.7% in the three months to March period compared to the same period a year ago, beating expectations for a 10.5% rise.

    ‘Robust growth’

    The GDP data comes two days after China’s customs agency said exports increased 11.5% from a year earlier in March, the first positive growth in overseas shipments in nine months. Imports were down a less-than-expected 7.6% following a 13.8% drop in the previous month, while the trade surplus came in at $29.9bn (£21bn; €26.3bn).

    Yuan Banknotes
    China’s central bank says it will target stability in the yuan exchange rateReuters

    Meanwhile, a Chinese deputy central bank governor said the economy had performed robustly in the first quarter but admitted that it faced several headwinds.

    “I’m pretty confident that we are going to have between 6.5% to 7% growth this year,” Yi Gang said. He reiterated that the central bank would target stability in the yuan and not allow the currency to “overshoot” its exchange rate by too much.

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  • China on track for a more sustainable economic expansion

    China on track for a more sustainable economic expansion

    Investors world-over fear that China could record another worse-than-expected slowdown this year. Over the past two decades, annual GDP growth in China has averaged around an impressive 10 percent, underpinned mostly by investments, as well as exports. The IMF expects China to account for almost 18 per cent of world economic activity in 2016. Hence a bump in China’s economy can definitely not be ignored. A drop in China’s growth rate from an expansion of more than 10 per cent in 2010 to 6.3 per cent expected this year could directly knock-off about 0.75 percentage points off the global growth rate.

    The recent week’s turmoil in China has hit both stocks and currency markets, sending shock-waves through global financial markets. Stock indexes around the world have seen massive sell-offs, global markets have fallen by 7.1% since January 1st, their worst ever start to a year. The instability brings back to light China’s stock market crash and a surprise Yuan devaluation by Beijing in August 2015 which sparked a global rout, and wiped out trillions of U.S. dollars in value from Chinese equities.

    Some of China’s leading economic indicators, such as its manufacturing index and factory output, are indeed slowing. This is a rational slowdown which would deliver a healthier and more sustainable growth path. The emerging markets and the rest of the world may just have to the deal with the “new normal” of global growth as the Asian giant seeks a slower, but more sustainable, economic expansion.

    Markets will keep focus on China data-deluge, including the GDP, industrial production and retail sales due tomorrow. Expectations are for data to remain weak. Barclays forecasts Q4 GDP growth data to have slowed further to 6.6 % y/y (consensus: 6.9%) from 6.9% in Q3. Industrial production is likely to have moderated, (Barclays: +5.9%y/y; consensus: 6.0%), retail sales (+11%y/y) and fixed asset investment (+10.1%y/y).

    PBoC has strongly signaled a desire for near-term stability by keeping its USD/CNY fixings stable at about 6.56 over the past week. On Monday, the PBoC said they will start implementing RRR to some banks involved in the offshore yuan market, in a move that seemed intended to soak up additional liquidity. The spot market opened at 6.5800 per dollar on Monday and was trading at 6.5792 in early trade, 48 pips below the previous close and 0.31 percent away from the midpoint, which was set at 6.559. The offshore yuan was trading -0.18 percent away from the onshore spot at 6.591 per dollar, firmer than the previous day’s close of 6.6165.

     

  • China retail sales to increase 10.7 per cent

    China retail sales to increase 10.7 per cent

    China’s retail sales, a key gauge of domestic consumption, is likely to post slower growth this year compared with 2014, commerce ministry said.

    Retail sales may expand around 10.7 per cent in 2015, Shen Danyang, spokesman at the Ministry of Commerce, told a news conference in Beijing today, without giving a reason. Retail sales rose 12 per cent last year.

    In the first 11 months of 2015, retail sales grew 10.6 per cent from a year earlier. In November, retail sales increased by an annual 11.2 per cent — the strongest monthly expansion this year.

    China’s external outlook remains gloomy. Chinese firms said global demand this year was worse than that during 2008-09 financial crisis, as per a recent survey by commerce ministry of more than 6,000 firms in 70 key industries.

    Subdued external demand, rising costs, slowing investment growth and the yuan’s appreciation have all weighed on China’s trade performance this year, Shen said.

    “Feedback from firms showed foreign trade was extremely difficult this year.”

    China’s net exports are likely to contribute around 12.3 per cent to the increase in the country’s GDP this year, he said, citing data from a research unit under his ministry.

    China’s trade remained weak in November with exports falling a worse-than-expected 6.8 per cent from a year earlier and imports tumbling 8.7 per cent.