Forex News – China industrial production lower than forecast
May 13, 2013 8:14 am
China released some mixed economic data this morning, mostly weaker than expected. This disappointed markets since the data highlights how the economic recovery in the world’s second largest economy is still fragile and progress is slow.
China’s annual industrial output grew at 9.3 percent in April, missing expectations of 9.4 percent. However this was still more than the previous month’s seven-month low of 8.9 percent.
Meanwhile, other data showed that fixed-asset investment, an important driver of economic activity, grew slower-than-expected at 20.6 percent in the first four months of 2013 compared to the same period a year ago.
The following are comments from various economists regarding the data:
ZHOU HAO, CHINA ECONOMIST, ANZ, SHANGHAI
“Overall, economic activity is weaker than expected. This could reinforce the case for the central bank to cut interest rates although such policy easing may not be effective in boosting growth.
JIANG CHAO, ANALYST, HAITONG SECURITIES, SHANGHAI
“Putting all economic activity data together, we can see the recovery momentum remains tepid, partially because the credit expansion cannot be fully channelled to the real economy.
“Monetary policy is now facing a dilemma, as there are many constraints for the central bank to make accurate response to the current economic situation.
“On the one hand, the central bank cannot cut interest rate for fears of reigniting property inflation, but on the other hand, China is seeing mounting hot money inflow pressure betting on yuan appreciation.”
China released some mixed economic data this morning, mostly weaker than expected. This disappointed markets since the data highlights how the economic recovery in the world’s second largest economy is still fragile and progress is slow.
China’s annual industrial output grew at 9.3 percent in April, missing expectations of 9.4 percent. However this was still more than the previous month’s seven-month low of 8.9 percent.
Meanwhile, other data showed that fixed-asset investment, an important driver of economic activity, grew slower-than-expected at 20.6 percent in the first four months of 2013 compared to the same period a year ago.
The following are comments from various economists regarding the data:
ZHOU HAO, CHINA ECONOMIST, ANZ, SHANGHAI
“Overall, economic activity is weaker than expected. This could reinforce the case for the central bank to cut interest rates although such policy easing may not be effective in boosting growth.
JIANG CHAO, ANALYST, HAITONG SECURITIES, SHANGHAI
“Putting all economic activity data together, we can see the recovery momentum remains tepid, partially because the credit expansion cannot be fully channelled to the real economy.
“Monetary policy is now facing a dilemma, as there are many constraints for the central bank to make accurate response to the current economic situation.
“On the one hand, the central bank cannot cut interest rate for fears of reigniting property inflation, but on the other hand, China is seeing mounting hot money inflow pressure betting on yuan appreciation.”
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