China: Q4 GDP growth likely slowed to 6.3% y/y – Standard Chartered

Analysts at Standard Chartered point out that China’s manufacturing PMI has dropped below the 50 threshold for the first time since July 2016 as it printed 49.4 in December from 50.0 in November.

Key Quotes

“The new orders PMI slid to a 35-month low to 49.7, and both the new export orders and import sub-indices fell deeper into contractionary territory, suggesting weaker domestic and external demand. Q4-2018 growth may have decelerated further to 6.3% y/y from 6.5% in Q3, dragging annual 2018 growth to 6.6% from 6.9% in 2017.”

“CPI and PPI inflation likely eased further in December mainly due to falling oil and services prices.”

“We expect imports to have ended a 25-month expansion streak and export growth to have been stagnant. FX reserves may have increased on a positive valuation effect.”