China: Economic growth slowdown worsened in Q4 2018 – BNP Paribas

Analysts at BNP Paribas point out that China’s real GDP growth has slowed to 6.4% in Q4 2018 year-on-year from 6.5% in Q3 as the slowdown in the industrial sector worsened in Q4 while growth in the services sector remains more dynamic.

Key Quotes

“Regarding demand components, exports have weakened markedly in the two last months of 2018, mostly due to the impact of US tariff hikes on imports of Chinese goods. Growth in household consumption has continued to decelerate (especially in the car market). Meanwhile, investment growth has picked up slightly, mainly in the infrastructure sector, in response to stimulus policy measures.”

“Export growth prospects remain dark in the very short term and then will depend on the possible trade deals that Beijing and Washington will be able to sign in the coming weeks. Domestic demand growth should be increasingly supported by counter-cyclical economic policies. Nonetheless, China’s economic growth will continue to slow in 2019 and remain below its long-term average.”