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14 Aug 2014
China: Growth momentum could slow in Q3 - NAB
FXStreet (Bali) - Gerard Burg, Senior Economist at NAB, notes that growth momentum in China could slow in Q3, due to the strength of 2013 stimulus.
Key Quotes
"Partial indicators in China point to a stabilisation in the economy, after the slowing trend across late 2013 and early 2014. This was particularly evident in second quarter GDP – which at 7.5% yoy was marginally stronger than Q1. That said, similar growth in the third quarter could be difficult to achieve, given the comparatively strong performance in Q3 2013, driven by the mini-stimulus program in that period."
"China’s growth in industrial production was fairly stable in July, with output rising by 9.0% yoy (marginally lower than the 9.2% increase in June). This level was also slightly below the market expectations, but remains broadly consistent with the view of an economy that has stabilised, following slowdown evident in earlier quarters."
"Fixed asset investment slowed in July, with year-on-year growth at 15.7% yoy (compared with 17.6% last month). The slowing trends in the real estate sector remain evident, with real estate investment increasing by 11.6% yoy (down from 12.9% in June) – the weakest rate of growth since the Global Financial Crisis."
"Following on from the noticeable expansion in Chinese credit in June, new credit in July was particularly weak – and well below market expectations. For the month of July, new total social financing – the broadest official measure of credit – was around RMB 273 million, the lowest level since October 2008."
Key Quotes
"Partial indicators in China point to a stabilisation in the economy, after the slowing trend across late 2013 and early 2014. This was particularly evident in second quarter GDP – which at 7.5% yoy was marginally stronger than Q1. That said, similar growth in the third quarter could be difficult to achieve, given the comparatively strong performance in Q3 2013, driven by the mini-stimulus program in that period."
"China’s growth in industrial production was fairly stable in July, with output rising by 9.0% yoy (marginally lower than the 9.2% increase in June). This level was also slightly below the market expectations, but remains broadly consistent with the view of an economy that has stabilised, following slowdown evident in earlier quarters."
"Fixed asset investment slowed in July, with year-on-year growth at 15.7% yoy (compared with 17.6% last month). The slowing trends in the real estate sector remain evident, with real estate investment increasing by 11.6% yoy (down from 12.9% in June) – the weakest rate of growth since the Global Financial Crisis."
"Following on from the noticeable expansion in Chinese credit in June, new credit in July was particularly weak – and well below market expectations. For the month of July, new total social financing – the broadest official measure of credit – was around RMB 273 million, the lowest level since October 2008."