Economic data unlikely to spring a surprise
Print Edition
ANALYSTS are not expecting any major surprises in the government’s economic figures for July, which are expected to be released over the coming days, though there is a degree of optimism that they might show signs of an upturn.
“While there will be no major changes, some indicators might improve,” said the Bank of Communications’ Tang Jianwei.
Retail sales likely grew 10.8 percent year on year, up from 10.6 percent in June, the economist said.
“While demand for manufactured goods was subdued, industrial output likely gained 7 percent, following a 6.8 percent rise in June,” he said.
Likewise, thanks to increased infrastructure spending by the government, fixed-asset investment increase in the first seven months is estimated to have accelerated to 11.6 percent, from 11.4 percent in the first half, he said.
On a less positive note, the Consumer Price Index likely grew at a faster pace for the second month in a row in July, mostly as a result of higher pork prices, said Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd.
“China’s wholesale pork prices have surged by more than 20 percent recently,” he said.
“Food prices are key to the CPI, so the inflation figure is likely to be higher as a result.”
Zhou said he expects the CPI to show a 1.6 percent rise in July, its highest this year and up from 1.4 percent in June.
“But even assuming the worst from the pork price rise, the CPI wouldn’t be beyond 2.1 percent, and that’s still much lower than the government’s target level of 3 percent,” he said.
Aside from pork prices, there have been no real signs of inflation growth momentum, and some experts estimate that the Producer Price Index might even have fallen in July, which would enable the central bank to maintain its accommodative monetary policies, Zhou said. “We expect the government to implement more easing policies to support economic growth,” he said.
China’s economy grew by 7 percent in the second quarter, in line with the government’s full-year target. Despite the strong performance, not everything was rosy in the period.
The official Purchasing Managers’ Index fell to 50 in July from 50.2 in June, suggesting manufacturing activity was on the brink of contraction.
“The decline of the official PMI suggested that the manufacturing sector remained weak despite of the better-than-expected second-quarter GDP,” Zhou said.
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