China: Economic recovery still unbalanced, GDP likely to rise up to 5% in Q3 – BBVA

Matías Salord FXStreet

The Chinese economy is undergoing a V-shape recovery, with Q2 GDP increased significantly from -6.8% y/y in Q1 to 3.2%, explained economists at BBVA. They point out the recovery is still unbalanced as the pickup of the supply side appears much faster than that of the demand side.

Key Quotes:

“Export growth remains the main drag on growth although it has been better than expected in recent months. However, the sustainability of the medical care equipment export boom remains questionable.”

“The better-than-expected Q2 GDP outturn will make the 2H stimulus policy more conservative, leaving more room for further uncertainties.”

“In our baseline scenario, we project that the GDP growth will steadily climb up to 5% y/y in Q3 and to around 6% y/y in the last quarter. As a consequence, the full-year growth rate prediction remains at 2.2%, higher than the IMF’s recent projection of 1%.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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