Chinese Q1 GDP data could suggest 5% growth target for 2024 is too ambitious – TD Securities

TD Securities analysts preview the next data published in China.

Authorities could soon step up fiscal measures

“We expect China's industrial production and retail sales to deviate lower in March, despite the seemingly optimistic March PMIs. We forecast 5.1% year-on-year growth in industrial production, below the 6% consensus , and following the big downside surprise in March exports The export results suggest that production may retreat as the Lunar New Year distortion fades and that the underlying output boost may not be as strong. as initially predicted. Although the March manufacturing PMI jumped back into expansion, it could take some time for manufacturers to translate that optimism into action.”

“We also expect retail sales to be at 4% year-on-year (cons: 5%), as contraction in imports and weakness in core inflation in March suggest downward spending during the month.”

“Based on our March forecasts, we project first-quarter GDP of 4.5% year-on-year (consensus: 5%), which could reignite speculation that China's official 2024 growth target of 5% is actually a very ambitious goal and that the authorities could soon intensify fiscal measures.”

Source: Fx Street

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