China: Nowcasting indicates further slowdown in Q4 – Standard Chartered

Analysts at Standard Chartered suggest that their nowcasting model for Chinese economy points to GDP growth of 6.26% y/y in the first two months of Q4-2018, easing from 6.5% y/y in Q3.

Key Quotes

“The estimate is based on 42 monthly time series covering real activity, monetary, fiscal, trade and price data. The data suggests that growth momentum weakened further.”

“Retail sales growth slowed to an average 8.4% in October-November from 9.0% y/y in Q3, mainly dragged down by automobile sales. Industrial production (IP) growth softened to an average 5.7% y/y from 6.0% in Q3. On the positive side, fixed asset investment (FAI) growth rebounded to an average 7.9% y/y in October-November from 4.4% in Q3 on stable manufacturing investment and improved infrastructure investment. Trade data remained relatively stable on average thanks to the front-loading of exports.”

“Looking ahead, low credit growth, a weak housing market and external uncertainty will continue to weigh on economic growth. We currently forecast GDP growth of 6.4% y/y in Q4.”