Chinese GDP numbers were slightly better than expected at 7.5% y/y in Q2 (Nordea: 7.4%; consensus: 7.4%; previous: 7.4%). The batch of monthly numbers – investment, industrial output and retail sales – were also released this morning. Most were fairly close to expectations or slightly better. We could see slightly better numbers out of China in the coming months, but seen in a longer perspective, we still believe the Chinese economy is slowing and rebalancing gradually.
Chinese GDP numbers were slightly better than expected at 7.5% y/y in Q2 (Nordea: 7.4%; consensus: 7.4%; previous: 7.4%).
Growth momentum seems to have picked up and could pick up even more speed in the second half of the year as authorities have eased economic policies a bit, perhaps to makes sure the full-year GDP growth target of 7.5% is met. Indeed, on a quarter-over-quarter and seasonally-adjusted basis, GDP growth increased somewhat more than expected to 2.0% (consensus: 1.8%; previous: 1.4%). This is exactly the same pattern that we have seen in 2012 and 2013: Relatively tight economic policies in the beginning of the year and then easing around mid-year and much stronger growth momentum in the second half.
We expect GDP growth in year-over-year terms to remain close to the current 7.5%-level in the remainder of the year and still see a clear downward trajectory over the coming years as rebalancing continues.
The batch of monthly numbers were also released this morning. Most numbers were fairly close to expectations or slightly better. Investment is 17.3% higher so far this year compared to the same period last year, industrial output increased 9.2% y/y in June, and retail sales increased 12.4% also in June.
All in all, today’s numbers were slightly better than expected. We could see slightly better numbers out of China in the coming months, but seen in a longer perspective, we still believe the Chinese economy is slowing and rebalancing gradually.
Nordea