China: Credit surge keeps growth stable in Q1, but will the taps stay on? - NAB

Gerard Burg, senior economist at NAB, notes that the China’s official data showed that the economy grew by 6.4% yoy in the first quarter of 2019, unchanged from the rate in Q4 2018, which means that growth remains at its equal slowest rate (with the trough of the GFC in Q1 2009) since 1990.

Key Quotes

“Deleveraging had a major impact on growth last year, but the outlook for this program is quite uncertain (given strong growth in new credit in Q1). Our forecasts for China’s growth are unchanged – with the structural slowdown of the economy set to continue in coming years. Growth is forecast at 6.25% this year, 6.0% in 2020 before dipping below 6% in 2021.”

“China’s industrial production grew remarkably strongly in March – increasing by 8.5% yoy, compared with just 5.3% yoy in January and February. This was the largest increase in industrial output since July 2014.”

“Compared with the levels across January and February, both exports and imports rose in March. The larger increase in exports leading to a wider trade surplus, totalling US$32.6 billion (up from US$21.9 billion in the first two months).”

“Growth in China’s fixed asset investment was more than offset by higher investment goods prices, meaning that our estimate of real investment was a little weaker – at 5.8% yoy in March (down from 6.4% yoy in the first two months).”

“Real retail sales dipped slightly in March – to 6.7% yoy (compared with 7.1% yoy across the first two months of the year).”

“New credit issuance remained strong in March, with a surge in bank loans accounting for the largest share of the increase. In the first quarter, new credit issuance totalled RMB 8.2 trillion – an increase of 40% yoy.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Bid in holiday-thinned trade, bullish channel breakdown confirmed

EUR/USD is mildly bid in Asia, but the gains could be short-lived, as yesterday’s sell-off seems to have put sellers in commanding position for the near term. 

EUR/USD News

GBP/USD: On the defensive despite strong UK retail sales

The path of least resistance for the GBP/USD appears to be on the downside. The British Pound slipped below 1.30 and closed under the April 5 low of 1.2987 yesterday.

GBP/USD News

USD/JPY: No reaction to BOJ’s decision to cut its routine buying of long-dated bonds

USD/JPY pair is currently trading at 111.93, having clocked a 112.00 earlier today. The Bank of Japan (BOJ) cut its purchases of bonds with maturities between 10 and 25 years to ¥160 billion, down ¥20 billion from the previous ¥180 billion. 

USD/JPY News

The Tale of the Prosperous Consumer-US Retail Sales

American consumers asserted the right to spend in a grand fashion in March boosting retail sales to the fastest expansion in 18 months as the booming job market put the shutdown marked holiday season to rest.

Read more

Gold Technical Analysis: Eyes corrective bounce on bullish 4H RSI divergence

Gold snapped its five-day winning streak with a 0.19 percent gain on Thursday, confirming a bullish divergence of the relative strength index on the 4-hour and hourly charts. 

Gold News

Majors

Cryptocurrencies

Signatures