China: Real GDP growth drops to 6.5% in Q3 – ABN AMRO

Arjen van Dijkhuizen, Senior Economist at ABN AMRO, explains that China’s real GDP growth rate for Q3-2018 printed 6.5% yoy as the growth came in weaker than in Q2 (6.7%) and Q1 (6.8%).

Key Quotes

“The slowdown was driven by the industrial sector, whereas growth in the primary and tertiary sectors showed edged up. The ongoing slowdown reflects the impact of the financial deleveraging campaign – with for instance a crackdown on shadow banking – and a slowdown in infrastructure spending. Moreover, the impact of the escalating trade conflict with the US is starting to make itself felt.”

“The PBoC eased its financial deleveraging campaign, and recently cut bank RRRs further by 100 bps . We expect the effects of these support measures to become more visible in the last quarter of this year. All in all, we expect China’s gradual slowdown to continue, with full-year growth falling from 6.9% in 2017 to 6.7% in 2018 and 6.3% in 2019.”