BEIJING- China’s economic growth likely hovered at its weakest in nearly 30 years in the fourth quarter as demand at home and abroad remained sluggish, though there were some signs of improvement late in the year as trade tensions with the United States eased.
The world’s second-largest economy is expected to have grown 6.0 percent in October-December from a year earlier, according to analysts polled by Reuters, unchanged from the previous quarter’s pace, which was the slowest since 1992 – the earliest quarterly data on record.
Forecasts by 65 analysts polled by Reuters ranged from 5.8 percent to 6.3 percent for the fourth quarter.
On a quarterly basis, growth likely stayed at 1.5 percent in Oct-Dec, also the same pace as in the preceding period, analysts said. The data will be released on Friday.
Better-than-expected GDP readings could lift stocks and global commodity prices, and boost the yuan, which has already strengthened to multi-month highs in January on optimism over the US-China trade deal.
Economic growth is expected to cool from 6.6 percent in 2018 to 6.1 percent in 2019 — the weakest in 29 years — and slow further to 5.9 percent in 2020, a separate Reuters poll showed, reinforcing views that Beijing will roll out more stimulus measures.
Ning Jizhe, head of the National Bureau of Statistics, has said that China is expected to hit its annual growth target of 6-6.5 percent in 2019.
“But we need to look beyond the official headline numbers to the significant headwinds facing the economy,” said Diana Choyleva, chief economist at Enodo Economics.
“These include rising unemployment, depressed consumer spending and private investment and growing financial risks as the deleveraging and de-risking campaign enters a critical phase among increasing stress in the financial system.”
Chinese policymakers have pledged more support for the economy while avoiding the kind of massive stimulus of the past, which quickly juiced growth rates but left a mountain of debt.
Beijing plans to set a lower economic growth target of around 6 percent in 2020, relying on increased state infrastructure spending to ward off a sharper slowdown, policy sources have said.
Investors will be closely watching December activity data for clues on how much momentum will be carried into the new year.
Factory indicators for November had shown surprising improvement in manufacturing as a raft of government measures propped up demand.
Manufacturing activity in China also expanded in December as signs of progress in trade talks boosted factories’ output and order books, surveys showed, though some analysts were not sure whether the gains could be sustained.
China will release fourth-quarter and 2019 gross domestic product (GDP) data on Friday, along with December factory output, retail sales and fixed-asset investment.
Data on Tuesday showed China’s exports rose for the first time in five months in December and by more than expected, with imports also beating estimates, signaling a modest recovery in demand as Beijing and Washington agreed to de-escalate their prolonged trade war. (Full Story)
But Washington will not roll back all its punitive measures, and the risk of another flareup remains.
This year is crucial for the ruling Communist Party to fulfill its goal of doubling GDP and incomes in the decade to 2020, and turning China into a “moderately prosperous” nation. — Reuters
