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June 6, 2015

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Home » Business » Economy

Economic data for May to signal stability

By Wang Yanlin | June 6, 2015, Saturday | Print Edition

CHINA’S trade, manufacturing and consumption may post an improvement in May while deflationary pressure is set to ease, indicating a stabilizing economy, analysts said before the release of the key data next week.

“We expect May’s data will signal a tentative stabilization,” said Wang Tao, an economist at UBS.

Tang Jianwei, an economist at the Bank of Communications, said nearly all activity data, including trade, industrial production and retail sales, are likely to show an improvement.

“Chinese authorities have introduced a series of supportive policies, and it is time for the policy effects to filter through the economy,” Tang said.

He projected that exports will shed 2 percent from a year earlier in May, an improvement from April’s drop of 6.4 percent. Imports are seen to fall 10 percent in May, compared with the slump of 16.2 a month earlier.

Deflationary pressure is also likely to ease because the Consumer Price Index, the main gauge of inflation, may hover around 1.4 percent, basically flat as in the previous three months. The Producer Price Index, the factory-gate measurement of inflation, may see a narrower contraction for the first time this year, Tang said.

He expected May’s industrial production to grow at a faster pace of 6.1 percent, above the 5.9-percent gain in April.

But fixed-asset investment may disappoint, Tang said, as he predicted it to add 11.8 percent in the first five months, 0.2 percentage points slower than that in January to April.

Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, is optimistic that a further downside risk of China’s economy might be limited as the government unveiled a more active fiscal policy and monetary policy conditions have eased.

To bolster a cooling economy China has cut both interest rates and bank reserve requirement ratio in the past few months and unveiled other fiscal stimulus.

In the first three months, China’s economy rose 7 percent year on year, making it the weakest quarterly growth in six years.

China has set this year’s official annual growth target at around 7 percent, down from the previous goal of 7.5 percent.

Economy


 

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