China Q2 GDP growth 7.6%, slowest in 3 years

Data crucial for investors facing a slowdown not only in China but across BRIC nations

China's grew 7.6% in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year on course for its softest showing since 1999.

The number released on Friday, which was in line with a Reuters poll, marked the sixth straight quarter of easing and left analysts combing a raft of accompanying data to assess whether the second quarter marks the bottom - or an extension - of the downward cycle.

The data is crucial for facing a not only in China, the world's second-largest economy, but anaemic across the grouping of major emerging economies - Brazil, Russia, India and - which combine as the biggest marginal generators of global growth.

"I think the 7.6% rise in is largely priced in by the and it partially alleviates some worries that the may plunge below 7%" said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.

"But the figure is close to the alarming line of 7.5% set by the government, which means Beijing will intensify its efforts to further ease its policy to bolster growth."

Other data released alongside revealed fixed asset investment was 20.4% in the year to June versus the 20.1% forecast in the benchmark Reuters poll.

Retail sales in June were up 13.7% on a year ago versus May's 13.8% and industrial output grew 9.5% versus expectations of 9.8%.

Asian share prices and emerging Asian currencies firmed modestly after the data.

MARKETS FEAR SHARPER SLOWDOWN

Inflation and trade data earlier this week showing fast-easing consumer prices, outright deflation in producer prices and import at less than half the rate expected in June sent a bearish shiver through financial markets.

Two interest rate cuts in the space of a month, accompanied by liberalisation moves allowing banks to discount borrowing costs by a further 30%, had already fuelled investors' fears that China's may be slowing more sharply than expected - jeopardising even Beijing's official full year target of 7.5%.

Companies on at least three continents have blamed slowing Chinese for their worsening performance.

This week alone, British fashion brand Burberry reported a decline in its sales growth, US chipmaker Advanced Micro Devices warned of disappointing Q2 revenue because of softer than expected sales in and Europe and South Airlines said its H1 net profit would likely fall in part on slower domestic growth.

Economists remain divided about when China's will reach the bottom of its current cycle, with many preparing to take the scalpel to full-year forecasts which, according to the last Reuters consensus poll in April, call 2012 at 8.4%.

The cut it full-year expectations for 2012 to 8.2% in new forecasts published on Thursday, down from the 8.5% they had estimated in April.

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Business Standard
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Business Standard

China Q2 GDP growth 7.6%, slowest in 3 years

Data crucial for investors facing a slowdown not only in China but across BRIC nations

Reuters  |  Beijing 

China's grew 7.6% in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year on course for its softest showing since 1999.

The number released on Friday, which was in line with a Reuters poll, marked the sixth straight quarter of easing and left analysts combing a raft of accompanying data to assess whether the second quarter marks the bottom - or an extension - of the downward cycle.

The data is crucial for facing a not only in China, the world's second-largest economy, but anaemic across the grouping of major emerging economies - Brazil, Russia, India and - which combine as the biggest marginal generators of global growth.

"I think the 7.6% rise in is largely priced in by the and it partially alleviates some worries that the may plunge below 7%" said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.

"But the figure is close to the alarming line of 7.5% set by the government, which means Beijing will intensify its efforts to further ease its policy to bolster growth."

Other data released alongside revealed fixed asset investment was 20.4% in the year to June versus the 20.1% forecast in the benchmark Reuters poll.

Retail sales in June were up 13.7% on a year ago versus May's 13.8% and industrial output grew 9.5% versus expectations of 9.8%.

Asian share prices and emerging Asian currencies firmed modestly after the data.

MARKETS FEAR SHARPER SLOWDOWN

Inflation and trade data earlier this week showing fast-easing consumer prices, outright deflation in producer prices and import at less than half the rate expected in June sent a bearish shiver through financial markets.

Two interest rate cuts in the space of a month, accompanied by liberalisation moves allowing banks to discount borrowing costs by a further 30%, had already fuelled investors' fears that China's may be slowing more sharply than expected - jeopardising even Beijing's official full year target of 7.5%.

Companies on at least three continents have blamed slowing Chinese for their worsening performance.

This week alone, British fashion brand Burberry reported a decline in its sales growth, US chipmaker Advanced Micro Devices warned of disappointing Q2 revenue because of softer than expected sales in and Europe and South Airlines said its H1 net profit would likely fall in part on slower domestic growth.

Economists remain divided about when China's will reach the bottom of its current cycle, with many preparing to take the scalpel to full-year forecasts which, according to the last Reuters consensus poll in April, call 2012 at 8.4%.

The cut it full-year expectations for 2012 to 8.2% in new forecasts published on Thursday, down from the 8.5% they had estimated in April.

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China Q2 GDP growth 7.6%, slowest in 3 years

Data crucial for investors facing a slowdown not only in China but across BRIC nations

China's economy grew 7.6% in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year growth on course for its softest showing since 1999. The GDP number released on Friday, which was in line with a Reuters poll, marked the sixth straight quarter of easing growth and left analysts combing a raft of accompanying data to assess whether the second quarter marks the bottom - or an extension - of the

China's grew 7.6% in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year on course for its softest showing since 1999.

The number released on Friday, which was in line with a Reuters poll, marked the sixth straight quarter of easing and left analysts combing a raft of accompanying data to assess whether the second quarter marks the bottom - or an extension - of the downward cycle.

The data is crucial for facing a not only in China, the world's second-largest economy, but anaemic across the grouping of major emerging economies - Brazil, Russia, India and - which combine as the biggest marginal generators of global growth.

"I think the 7.6% rise in is largely priced in by the and it partially alleviates some worries that the may plunge below 7%" said Jiang Chao, an analyst at Guotai Junan Securities in Shanghai.

"But the figure is close to the alarming line of 7.5% set by the government, which means Beijing will intensify its efforts to further ease its policy to bolster growth."

Other data released alongside revealed fixed asset investment was 20.4% in the year to June versus the 20.1% forecast in the benchmark Reuters poll.

Retail sales in June were up 13.7% on a year ago versus May's 13.8% and industrial output grew 9.5% versus expectations of 9.8%.

Asian share prices and emerging Asian currencies firmed modestly after the data.

MARKETS FEAR SHARPER SLOWDOWN

Inflation and trade data earlier this week showing fast-easing consumer prices, outright deflation in producer prices and import at less than half the rate expected in June sent a bearish shiver through financial markets.

Two interest rate cuts in the space of a month, accompanied by liberalisation moves allowing banks to discount borrowing costs by a further 30%, had already fuelled investors' fears that China's may be slowing more sharply than expected - jeopardising even Beijing's official full year target of 7.5%.

Companies on at least three continents have blamed slowing Chinese for their worsening performance.

This week alone, British fashion brand Burberry reported a decline in its sales growth, US chipmaker Advanced Micro Devices warned of disappointing Q2 revenue because of softer than expected sales in and Europe and South Airlines said its H1 net profit would likely fall in part on slower domestic growth.

Economists remain divided about when China's will reach the bottom of its current cycle, with many preparing to take the scalpel to full-year forecasts which, according to the last Reuters consensus poll in April, call 2012 at 8.4%.

The cut it full-year expectations for 2012 to 8.2% in new forecasts published on Thursday, down from the 8.5% they had estimated in April.

image
Business Standard
177 22

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