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Nomura projects China's growth in 2013
By Ye Zhen |
December 12, 2012, Wednesday
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Online Edition
Online Edition
CHINA'S economy may continue to recover in the first half of 2013 before it slows down again in the second half when inflation goes up and policy easing phases out, Nomura Securities said in a report released today.
The broker expects China's economy to grow at 8.2 percent in the first half thanks to robust fixed asset investment. However, the growth will moderate to 7.2 percent in the second half as the government starts to rein in rising inflation, according to the report.
"Infrastructure investment has already picked up strongly, helped by policy easing and the momentum is likely to continue in the first half of 2013. Housing investment may also accelerate moderately in the first half after falling in the first three quarters of 2012," Zhang Zhiwei, Nomura's chief economist for China and author of the report, said today.
"The recovery in H1 would be driven by counter-cyclical policy easing, not an improvement in economic fundamentals. The GDP growth should return to a rate below 7.5 percent," Zhang said.
The broker forecasts China's CPI to rise sharply to above 4 percent by mid-2013 and average 5.1 percent in the second half of 2013 due to rising production costs.
For the whole of 2013, the country's CPI is likely to reach 4.2 percent, higher than the widely estimated rate of 3.2 percent, according to the report.
The broker said there will be two rate hikes in the second half of 2013 as the government becomes more tolerant of slower growth but less tolerant of rising inflation.
"Moreover, the government may tighten policies if there are signs of risk in the economy, such as a sharp rebound of home prices or excessive leverage in the financial system," the report said.
The broker expects China's economy to grow at 8.2 percent in the first half thanks to robust fixed asset investment. However, the growth will moderate to 7.2 percent in the second half as the government starts to rein in rising inflation, according to the report.
"Infrastructure investment has already picked up strongly, helped by policy easing and the momentum is likely to continue in the first half of 2013. Housing investment may also accelerate moderately in the first half after falling in the first three quarters of 2012," Zhang Zhiwei, Nomura's chief economist for China and author of the report, said today.
"The recovery in H1 would be driven by counter-cyclical policy easing, not an improvement in economic fundamentals. The GDP growth should return to a rate below 7.5 percent," Zhang said.
The broker forecasts China's CPI to rise sharply to above 4 percent by mid-2013 and average 5.1 percent in the second half of 2013 due to rising production costs.
For the whole of 2013, the country's CPI is likely to reach 4.2 percent, higher than the widely estimated rate of 3.2 percent, according to the report.
The broker said there will be two rate hikes in the second half of 2013 as the government becomes more tolerant of slower growth but less tolerant of rising inflation.
"Moreover, the government may tighten policies if there are signs of risk in the economy, such as a sharp rebound of home prices or excessive leverage in the financial system," the report said.
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