As China's economy moves into the second quarter of the year, a few indicators are pointing to sluggish growth ahead if things don't turn around, raising expectations for monetary policy easing.
BEIJING — As China's economy moves into the second quarter of the year, a few indicators are pointing to sluggish growth ahead if things don't turn around, raising expectations for monetary policy easing.The National Bureau of Statistics is due to release data on retail sales, industrial production and fixed asset investment for April on Friday. Analysts polled by Reuters as of Tuesday expect a slight increase compared to March. in funds for major strategic projects.
"Some of the weakness speaks to genuine sluggish demand in China at present," said Hui Shan, Goldman Sachs' China chief economist, in a note Sunday. "If the public sector does not come to support credit growth in a timely manner, a sharp growth deceleration is likely to occur going forward as economic agents will be forced to cut consumption and investment to meet their debt obligations," the firm said in late April.
A survey by The China Beige Book in April found that corporate borrowing fell, dragged down by services, while manufacturing saw an increase in demand. The overall decline came despite more loans getting approved and lower interest rates, making it cheaper to borrow., a measure of money supply that includes cash, cash equivalents and certain deposits, grew by 7.
"April credit data are disappointing, but that's mainly due to regulatory changes rather than a sharp deterioration in the underlying demand," Macquarie's Chief China Economist Larry Hu said in a report.
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