China Q4 GDP growth to stabilize at 6.9%
Print Edition
CHINA’S economic data for December may show gross domestic product growth stabilized at 6.9 percent in the fourth quarter of 2015 but it’s premature to say China’s economy has bottomed out, analysts said ahead of the data release today.
“The economy stabilized due to recent growth support policies trickling through and growth in property sales,” said Wang Tao, a UBS economist.
Lian Ping, chief economist at the Bank of Communications, said almost all activity data may improve in December except for a fall in imports and easing industrial production.
“But it is still too early to say China’s economy has bottomed out,” Lian said.
Lian forecast industrial production may grow 6 percent from a year earlier last month but easing slightly from 6.2 percent in November, which was the strongest since June.
Growth in retail sales may stabilize at 11.2 percent amid buoyant spending at the year end. Fixed-asset investment may add 10.3 percent last year, up 0.1 percentage points from the gain in the first 11 months.
However, exports are set to shed 5.5 percent year on year in December, improving from the loss of 6.8 percent a month earlier. Imports may fall 10 percent, worsening from the 8.7 percent drop in November, Lian said.
“The intensive accommodative policies should have underpinned near-term economic growth momentum, stabilizing the fourth-quarter growth of last year at 6.9 percent,” said Wang with UBS, a view shared by Lian. The growth was in line with the government’s official target for the year.
China’s economy grew 6.9 percent from a year earlier in the third quarter of 2015, the same growth rate as in the first three quarters. It was the slowest pace since the aftermath of the 2009 global financial crisis.
But China may still need policies to ease further to sustain the growth, said Liu Ligang, an economist at Australia & New Zealand Banking Group Ltd.
“With soft growth momentum and deflationary pressures growing, we expect the government to further ease its monetary policy and continue to implement an expansionary fiscal policy,” Liu said.
There seems to be more room for supportive policies as the Consumer Price Index is likely to rise 1.5 percent in December, same as that in November.
The Producer Price Index, which measures factory-gate inflation, is seen as negative again for a 46th straight month, according to Lian.
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