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 falls below 1.1250 as US retail sales beat expectations

EUR/USD is trading below 1.1250, extending its slide. US retail sales beat expectations with the control group rising by 0.5% in May on top of upward revisions. US-Sino trade tensions are in play.

EUR/USD News

GBP/USD falls towards 1.2600 after US retail sales

GBP/USD is trading closer to 1.2600, around the weekly lows. US retail sales beat expectations and trade tensions also boost the USD. The UK is bracing for Boris Johnson to become PM. US consumer confidence is next.

GBP/USD News

USD/JPY climbs to mid-108s as 10-year US T-bond yield erases losses

Today's upbeat macroeconomic data releases from the United States provided a boost to the greenback and allowed the USD/JPY pair to advance to a session top of 108.50.

USD/JPY News

Gold surges through $1350 level, highest since April 2018

Gold caught some aggressive bids in the last hour and surged to the highest level since April 2018, around the $1358 region.

Gold News

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Alone in the dark of outer space...heading to the Moon

It is almost usual practice of the Crypto market that technical extremes occur at the end of the working week – setting the stage for action over the weekend.

Read more

Majors

Cryptocurrencies

Signatures