China’s economy may be flat in October
Print Edition
CHINA’S economic performance in October may be flat from a month earlier but analysts are not too perturbed because they say this points to stability in the economy, ahead of data to be released next week.
“The growth in October activity is likely to be flat,” said Tang Jianwei, an analyst with the Bank of Communications. “The broad picture is not gloomy, but definitely not rosy as well.”
Tang said trade will continue to be a bright spot with exports rising 11 percent and imports adding 5 percent. Though encouraging, they are slower than the 15.3 percent jump in exports and 7 percent rise in imports in September.
Wang Tao, a UBS economist, said the growth in exports may have slowed but US and European business sentiment “for China’s exports has stayed firm in October.”
Inflation growth in October may weaken to around 1.4 percent. In September, the Consumer Price Index eased to a four-year low of 1.6 percent.
“The domestic raw material prices slid further on stuttering domestic demand, as stabilizing steel and cement prices were more than offset by a large drop in nonferrous metals and rubber prices while global commodity prices fell,” Wang said.
She predicted the Producer Price Index, the factory-gate gauge of inflation, may drop by as much as 2.2 percent.
Data already released have shown that growth has moderated in the manufacturing and services sectors.
The official Purchasing Managers’ Index, which measures operational conditions in large state-owned industrial companies, stood at 50.8 in October, the lowest level in five months.
The official non-manufacturing PMI, which tracks activity in service companies, fell to a nine-month low of 53.8.
China’s economy grew at the slowest pace of 7.3 percent in over five years in the third quarter, but major indicators, including industrial production, fixed-asset investment and retail sales, all pointed to stabilization in September.
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