China: Targeted support offsets April slump – TD Securities

Alex Loo at TD Securities highlights that China’s April data were weak, with soft retail sales and falling investment, while exports and housing prices offered some relief. The bank expects Beijing to rely on targeted fiscal measures, especially infrastructure and consumer support, while maintaining a 4.6% 2026 GDP forecast and seeing the PBoC cautious on further monetary easing.

Authorities eye fiscal fine-tuning over shock

"We expect targeted fiscal stimulus from Beijing, especially on infrastructure investment rather than large-scale measures."

"We expect authorities to roll out more targeted fiscal stimulus which is more of a fine-tuning of support since Q1 GDP was strong."

"We doubt authorities have reached a stage of being spooked by the data and would prefer to stay more cautious on any large-scale stimulus rollout."

"Beijing is likely to boost infrastructure spending again to drive public Fixed-Asset Investments (FAI), building on the CNY800bn allocated from the Budget this year."

"Any big shift in fiscal stance is likely to happen after July when China gets the full Q2 numbers to reassess."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)