April Data To Show Growth Stabilizing, For Now
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[May 06, 2014]
BEIJING (Reuters) - Growth in
China's factory output and investment likely stabilized in April as the
government uses targeted policy measures to underpin growth, while the
pace of declines in exports and imports may have eased, a Reuters poll
However, the world's second-largest economy may only get a
temporary boost from such policy support, as growth will inevitably
slow while the government seeks to tackle high debt levels and
excessive factory capacity.
China's industrial output may have grown 8.9 percent in April from a
year earlier, slightly ahead of the 8.8 percent rise in March,
according to the poll of 18 economists.
Fixed-asset investment growth likely grew 17.7 percent in the first
four months from a year earlier, also slightly firmer than the 17.6
percent pace seen in the first three months. The government only
publishes cumulative investment data.
The government has in recent weeks hastened construction of railways
and affordable housing and cut taxes for small firms to support the
slowing economy, but top leaders ruled out any forceful policy
measures in favor of reforms.
"Economic growth is stabilizing but it's hard to see a rebound
because policies that help stabilize growth are limited," Peng
Wensheng, chief economist at CICC said in a research note.
"The economy still faces downward pressures in the future."
The government is trying to restructure the economy so it is driven
more by consumption than the traditional engines of exports and
investment, but wants to avoid a sharp slowdown that could fuel job
losses and threaten social stability.
Recent official and private factory surveys for April pointed to
initial signs of stabilization, but external demand likely remained
Exports are expected to fall 1.7 percent in April from a year
earlier, compared with a 6.6 percent fall in March. The pace of
decline in imports may have moderated to 2.3 percent in April from
11.3 percent in March, the poll showed.
As a result, the April trade surplus is likely to widen to $13.9
billion from $7.7 billion in March.
Retail sales, a key gauge of consumption, may have grown 12.2
percent in April, the same as in March.
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An earlier, separate Reuters poll showed China's economic growth
could slow to 7.3 percent in the second quarter from 7.4 percent in
the previous three months. The economy is expected to grow 7.3
percent in 2014 - the weakest showing in 24 years.
Analysts see the property sector as a key risk to growth as evidence
mounts of a rapid cooling in what had been one of the few strong
spots in the economy.
In April, banks may have granted 880 billion yuan ($140.90 billion)
in new loans, down from 1.05 trillion yuan in March, while annual
growth in the broad M2 money supply may hold largely steady at 12.2
percent, the poll showed.
Annual consumer inflation is expected to ease to 2.0 percent in
April from 2.4 percent in March, while the producer price index is
expected to drop 1.8 percent, falling for a 26th straight month but
moderating from a decline of 2.3 percent in the previous month.
Trade data will be released on Thursday, followed by inflation data
on Friday, while activity data will be released on Tuesday, May 13.
($1 = 6.2455 Chinese Yuan)
(Reporting by Kevin Yao; Editing by Kim Coghill)
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