5 Mar 2015
China knocks down growth forecasts, no widening of CNY band – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Team updates about the key developments in the Chinese market, with the country seeing a downward change in growth, CPI and trade growth forecasts.
Key Quotes
“China National People's Congress opened today, and instead of waiting for the conclusion of the summit to unveil 2015 targets, Premier Li pulled the curtain on govt forecasts from the start. As anticipated, China is forecasting 2015 GDP at "around 7%" - a new 11-year low and a softer (more vague) target than "about" 7.5% tipped for 2014.”
“CPI is now seen at around 3.0% vs 3.5% in 2014, while trade growth projections were knocked down to 6.0% from 7.5% in 2014.”
“2015 M2 is estimated at 12.0%, also a notable downgrade from 13% last year.”
“Among the quantitative objectives, policymakers also outlined a range of qualitative initiatives - progress on cross-border yuan payment system, convertibility on capital account, broader use of FX reserves, more freely floating yuan, a deposit insurance system, land reform to stabilize housing consumption, end of price controls for pharmaceuticals, and curbing of overcapacity in the outdated coal industry to help reduce CO2 emissions.”
“Pharma names and Yuan are among the early beneficiaries of this ambitious agenda, even though the broader mainland market is down by about 1%.”
“Separately, PBoC adviser Chen also forecasted continued monetary policy easing in H1 of 2015, but no widening of Yuan trading band.”
Key Quotes
“China National People's Congress opened today, and instead of waiting for the conclusion of the summit to unveil 2015 targets, Premier Li pulled the curtain on govt forecasts from the start. As anticipated, China is forecasting 2015 GDP at "around 7%" - a new 11-year low and a softer (more vague) target than "about" 7.5% tipped for 2014.”
“CPI is now seen at around 3.0% vs 3.5% in 2014, while trade growth projections were knocked down to 6.0% from 7.5% in 2014.”
“2015 M2 is estimated at 12.0%, also a notable downgrade from 13% last year.”
“Among the quantitative objectives, policymakers also outlined a range of qualitative initiatives - progress on cross-border yuan payment system, convertibility on capital account, broader use of FX reserves, more freely floating yuan, a deposit insurance system, land reform to stabilize housing consumption, end of price controls for pharmaceuticals, and curbing of overcapacity in the outdated coal industry to help reduce CO2 emissions.”
“Pharma names and Yuan are among the early beneficiaries of this ambitious agenda, even though the broader mainland market is down by about 1%.”
“Separately, PBoC adviser Chen also forecasted continued monetary policy easing in H1 of 2015, but no widening of Yuan trading band.”