Standard Chartered’s Hunter Chan and Shuang Ding expect China’s January-February hard data to show resilience despite soft official PMIs. They forecast solid Industrial Production, a rebound in Retail Sales, and robust Trade growth, while Fixed Asset Investment stabilizes and Real Estate investment continues to contract. Inflation is seen rising modestly, with M2 growth staying elevated and credit momentum easing.
Soft PMIs but solid activity indicators
“China’s official manufacturing PMI fell further to a five-month low of 49 in February from 49.3 in January, partly due to the Lunar New Year holiday disruption.”
“We expect industrial production (IP) growth to have remained solid at 4.9% y/y in January-February as production PMI stayed above 50 on average.”
“Retail sales growth likely rebounded to 3.4% y/y on the holiday boost.”
“The contraction in fixed asset investment (FAI) may have halted as funding for infrastructure projects was likely replenished at the start of the year.”
“Trade growth may have remained robust on lowered tariffs and steady global demand for AI-related materials and products.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/china-data-resilience-offsets-weak-sentiment-standard-chartered-202603042052
