FXStreet (Delhi) – Research Team at Nomura note that the concerns regarding the China’s growth story are rising once again, driven by the recent equity market sell-offs, capital outflows and disappointing economic data. This in turn is beginning to pressure asset markets again.
Key Quotes
“Many doubt the official 7% GDP growth number for H1 2015, while some even put current growth at 4% or below.
“In our view, the official data are largely reliable – if we exclude non-sustainable contributing factors to growth, the official data have indicated a significant slowdown of “true” growth to near 6%.”
“Due to the massive equity market rally (from Q4 2014) and high trading volumes, we estimate that the financial sector contributed an outsized 1.4 percentage points (pp) to the reported 7% y-o-y growth in H1, about 0.7pp more than usual. The near-6% y-o-y GDP growth is also consistent with monthly activity data, such as industrial production (IP, 6.3%), fixed asset investment (11.4%) and retails sales (10.4%) in H1.”
“For August, most high-frequency data improved, partly due to a low base last year, while in contrast, some leading indicators point to weaker signs. Overall, our verdict is that economic growth has yet to stabilise.”
For more information, read our latest forex news.
No comments:
Post a Comment