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China: GDP beats expectations again in Q2

Summary:
Chinese GDP higher than forecast in Q2; we expect 2017 GDP growth of 6.8%.Chinese GDP for Q2 2017 grew by 6.9% year-on-year (y-o-y) in real terms, the same pace of expansion as in Q1. The growth figure beats both the consensus forecast and our own estimate. We have decided to revise our Chinese GDP growth forecast for 2017 to 6.8% from 6.5%, and the forecast for 2018 to 6.3% from 6.2%. These revisions reflect both the stronger-than-expected growth in Q2 and a better outlook for the near term as suggested by the latest data, in particular related to fixed asset investment. Three factors have led to the positive surprise: a resilient property market, strong infrastructure investment and rising global demand. The People’s Bank of China (PBoC) will likely maintain a neutral policy stance with

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Chinese GDP higher than forecast in Q2; we expect 2017 GDP growth of 6.8%.

China: GDP beats expectations again in Q2

Chinese GDP for Q2 2017 grew by 6.9% year-on-year (y-o-y) in real terms, the same pace of expansion as in Q1. The growth figure beats both the consensus forecast and our own estimate.

We have decided to revise our Chinese GDP growth forecast for 2017 to 6.8% from 6.5%, and the forecast for 2018 to 6.3% from 6.2%. These revisions reflect both the stronger-than-expected growth in Q2 and a better outlook for the near term as suggested by the latest data, in particular related to fixed asset investment.

Three factors have led to the positive surprise: a resilient property market, strong infrastructure investment and rising global demand.

The People’s Bank of China (PBoC) will likely maintain a neutral policy stance with a tightening bias for the rest of the year. If interest rates for general loans and mortgage loans rise as a result, it will likely have a negative impact on growth in H2 2017.

About Dong Chen
Dong Chen
Dong Chen is senior Asia economist, Pictet Wealth Management. - Twelve years of working experience in macroeconomic research - Extensive knowledge about asset allocation and multi-asset class portfolios - Rich client-facing experiences with high-net-worth clients across Asia - Rigorous training in economics and comprehensive knowledge about Asian economies and business - Strong analytical skills and solid background in statistical/econometric analysis - Strong communication / presentation skills - Native Mandarin Chinese speaker and fluent in English Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

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