China: Industrial production growth to slow, CPI inflation likely to rise - Nomura

The analysis team at Nomura lists down their forecasts for the Chinese economic releases for the month of April.

Key Quotes

“We expect industrial production growth (data out on 15 May) to slow to 7.2% y-o-y in April from 7.6% in March, as the moderating output sub-index of the official PMI suggests some slowing in momentum. Fixed asset investment growth may moderate slightly by 0.1 percentage point (pp) to 9.1% y-o-y (ytd), as property investment is likely to lose steam gradually after intense policy tightening in past months. We expect retail sales growth to edge down 0.2pp to 10.7% y-o-y, partly due to seasonal factors.”

“We forecast CPI inflation (10 May) to rise to 1.3% y-o-y in April from 0.9% in March, as the fall in food prices likely levelled off. PPI inflation may have eased further to 6.8% y-oy, as implied by flat high-frequency producer goods prices data and the sharp moderation in the purchasing price index of the official PMI.”

“We expect export growth in USD terms (8 May) to slow but remain resilient at 10.0% y-oy from 16.4% in March, supported by robust external demand. Import growth may have moderated to 15% y-o-y from 20.3%. As a result, the trade balance looks set to widen to USD37.4bn from USD23.9bn in March, on our estimates.”

“Regarding money growth and credit data (10-15 May), we forecast new RMB loans and aggregate financing to moderate to RMB700bn and RMB1.25trn, respectively, in April. We also expect M2 growth to edge up to 10.8% y-o-y from 10.6% in March, in line with slightly faster loan growth.”