China: Significant slowdown in economic activities this summer - BBVA

According to the Research Department at BBVA, recent economic data from China confirms growth slowed down over the last months. 

Key Quotes: 

“A batch of August indicators announced today pointed to a significant slowdown in economic activities this summer. Together with the previously released trade and credit data, it suggests that the escalating uncertainties from the US-China trade war dampened people’s confidence and hamper economic expansion.”

“The growth outlook in the rest 2019 depends on the evolution of the persistent US-China trade war as well as the authorities’ policy responses to the current growth deceleration. We therefore anticipate more monetary and fiscal easing measures to be deployed to sustain growth momentum. Altogether, we maintain our 2019 GDP forecasting at 6% (the authorities’ target: 6-6.5%). The risk of growth deceleration in 2H 2019 remains high.”

“The growth slowdown in August is broad-based as all indicators are below the previous readings and the market consensus: industrial production decelerated from 4.8% y/y of July to 4.4% y/y; fixed asset investment also decreased to 5.5% ytd y/y from 5.7% ytd y/y previously; retail sales also edged down to 7.5% y/y from 7.6% y/y in August.”