China: Comforting 1Q16 GDP and March economic data – ING

By FXStreet Tim Condon, Chief Economist at ING, suggests that they are reviewing their Chinese yearend policy interest rate forecasts, 3.85% for the 1-year lending rate and 1.00% for the 1-year deposit rate, for upward revision.

Key Quotes

“GDP growth came in at the expected 6.7%. The slowdown from 6.8% in 4Q15 was across-the-board with the primary (agriculture) sector posting the largest percentage point slowdown and the tertiary (services) sectors contributing most to the slowdown in headline growth. The wonky deflators problem persisted. Nominal GDP growth accelerated to 7.1% from 6.0% with services accounting for virtually all of it.

From the March activity data, fixed asset investment growth accelerated to 10.7% YTD YoY in March from 10.2% in January-February on faster growth of infrastructure and real estate investment. Manufacturing FAI growth slowed.

Retail sales, the other monthly spending indicator, grew 10.3% YTD YoY in March, up from 10.2% in January-February on a chunky 0.85% seasonally adjusted sequential rise.

We expect the authorities to view today’s data as evidence that current policy settings are appropriate. We are reviewing our yearend policy interest rate forecasts 3.85% for the 1- year lending rate and 1.00% for the 1-year deposit rate for upward revision (latest 4.35% and …read more

Source:: FX Street