by Chris Becker
From Capital Economics on today’s GDP print from China:
GDP growth edged down from 6.5% y/y in Q3 to 6.4% last quarter, in line with both the Bloomberg median and our forecast. GDP growth for 2018 as a whole was 6.6%, down from 6.8% in 2017. The official GDP figures have been too stable in recent years to be a good guide to China’s economic performance. Our own measure, the China Activity Proxy (CAP), suggests that growth has already slowed by one percentage point since mid-2017
The latest data suggest that economic growth remained weak by past standards at the end of 2018 but held up better than many feared, in part thanks to a policy-driven recovery in infrastructure spending. Still, with the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify in the coming months, China’s economy is likely to weaken further before growth stabilises in the second half of the year on the back of expanded policy stimulus.
Full report available here (PDF)