Weak data may see policy easing
By Richard Fu |
May 12, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S factory output last month expanded the least in three years while urban investment slowed to the lowest level in a decade, raising hopes the government will move to stimulate the world's second-largest economy.
Industrial production rose 9.3 percent in April from a year earlier, the National Bureau of Statistics said yesterday. This was the lowest since May 2009 and was below a 12.2 percent median forecast by 13 economists polled by Dow Jones Newswires.
Economists said the weak output data and the dismal trade numbers released on Thursday signal the economic slowdown is deepening and may force the government to ease monetary policy soon.
"The decline was faster than expected and could result in reserve requirement ratio cuts and other stimulus measures soon," said Alaistair Chan, an economist at Moody's Analytics. "We still expect growth to decelerate further before a rebound in the second half of the year."
China's economic growth slowed in the first quarter to the least in almost three years.
Data released by the statistics bureau also showed urban fixed-asset investment surged 20.2 percent year on year to 7.56 trillion yuan in the first four months of this year. But the growth was just under a market consensus of 20.5 percent and slower than the 20.9 percent increase in January to March.
Moody's, however, said it expects FAI to improve in the second half of the year as the benefits from increased bank lending and easing monetary policy flow through the economy.
The bureau also reported the country's non-public FAI in the first four months was 4.69 trillion yuan, up an annual 27.3 percent and accounting for 62 percent of the nation's overall urban FAI.
It marked the first time the bureau has released data on private FAI, an effort to track the development of private investment in the country.
The bureau said the release was in line with the need to enhance data calculations on private investment.
Industrial production rose 9.3 percent in April from a year earlier, the National Bureau of Statistics said yesterday. This was the lowest since May 2009 and was below a 12.2 percent median forecast by 13 economists polled by Dow Jones Newswires.
Economists said the weak output data and the dismal trade numbers released on Thursday signal the economic slowdown is deepening and may force the government to ease monetary policy soon.
"The decline was faster than expected and could result in reserve requirement ratio cuts and other stimulus measures soon," said Alaistair Chan, an economist at Moody's Analytics. "We still expect growth to decelerate further before a rebound in the second half of the year."
China's economic growth slowed in the first quarter to the least in almost three years.
Data released by the statistics bureau also showed urban fixed-asset investment surged 20.2 percent year on year to 7.56 trillion yuan in the first four months of this year. But the growth was just under a market consensus of 20.5 percent and slower than the 20.9 percent increase in January to March.
Moody's, however, said it expects FAI to improve in the second half of the year as the benefits from increased bank lending and easing monetary policy flow through the economy.
The bureau also reported the country's non-public FAI in the first four months was 4.69 trillion yuan, up an annual 27.3 percent and accounting for 62 percent of the nation's overall urban FAI.
It marked the first time the bureau has released data on private FAI, an effort to track the development of private investment in the country.
The bureau said the release was in line with the need to enhance data calculations on private investment.
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