29 May 2014
China: Another important policy easing signal - Nomura
FXStreet (Bali) - There is new evidence that China's policy easing has started to pick up in Q2, notes Zhiwei Zhang, Economist at Nomura.
Key Quotes
"The Ministry of Finance announced today that it had issued a policy statement on 21 May to request local governments speed up the disbursement of fiscal expenditure."
"This is an unusual statement which shows the sense of urgency on the part of the government to boost growth. The statement acknowledges “the economy still faces pressure to slow and some difficulties cannot be underestimated"."
"It reinforces our view that policy easing has started to pick up in Q2, the size of easing is becoming significant from a macro perspective, and there will likely be more easing measures in H2 if property investment growth slows further."
"We maintain our view that policy easing should defer the risk of a hard landing to 2015, and growth will likely pick up to 7.4% y-o-y in Q3 and 7.5% in Q4 from 7.1% in Q2."
'We continue to expect growth to slow to 6.8% in 2015 as policy easing should push up inflation next year and limit the scope of further easing."
Key Quotes
"The Ministry of Finance announced today that it had issued a policy statement on 21 May to request local governments speed up the disbursement of fiscal expenditure."
"This is an unusual statement which shows the sense of urgency on the part of the government to boost growth. The statement acknowledges “the economy still faces pressure to slow and some difficulties cannot be underestimated"."
"It reinforces our view that policy easing has started to pick up in Q2, the size of easing is becoming significant from a macro perspective, and there will likely be more easing measures in H2 if property investment growth slows further."
"We maintain our view that policy easing should defer the risk of a hard landing to 2015, and growth will likely pick up to 7.4% y-o-y in Q3 and 7.5% in Q4 from 7.1% in Q2."
'We continue to expect growth to slow to 6.8% in 2015 as policy easing should push up inflation next year and limit the scope of further easing."