China: Expansion to remain intact, albeit at a slower pace - Wells Fargo

Chinese GDP growth data will be released on Monday. Analysts at Wells Fargo, forecast real GDP growth of 6.7% during the second quarter. 

Key Quotes: 

“Real GDP in China grew 6.8 percent in Q1 year over year, matching the pace of growth seen in the prior two quarters. However, recent monthly indicators point to a likely slower pace of GDP growth registered in Q2. Retail sales rose just 8.5 percent in May year over year, the slowest pace of growth since 2003, and fixed investment spending grew a similarly slower 6.1 percent, reinforcing the continued downshift in capital-intensive production as the economy continues to move in line with its advanced counterparts.”

“The Chinese central bank also recently cut its required reserve ratio 50 bps, and this easing of monetary policy along with ongoing trade disputes caused the Chinese renminbi to depreciate markedly against the U.S. dollar in recent weeks.”

“We look for the expansion in China to remain intact, albeit at a slower pace than the double-digit growth rates the economy enjoyed in previous years, and forecast real GDP growth of 6.7 percent in Q2.”

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