China: Growth normalised in November – Standard Chartered
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IP growth picked up partly due to base effect; FAI and retail sales growth normalised from October jump. Housing demand may have improved, with positive developments in new home sales and home prices. 2024 growth target is likely to be achieved; we maintain our 2025 growth forecast at 4.5%, Standard Chartered's economists Hunter Chan and Shuang Ding note.
IP and services production index growth remained resilient
"Real activity performance was mixed in November, with production activity still resilient while retail sales and investment growth moderated after a spike in October. Industrial production (IP) growth picked up 0.1ppt to 5.4% y/y in November, versus the Q3 average of 5%. Services production index growth eased 0.2ppt m/m to 6.1% in November, compared with the Q3 average of 4.8%. We estimate that monthly GDP growth stayed above 5% y/y for another month."
"Fixed asset investment (FAI) grew 3.3% y/y in 11M-2024, 0.1ppt slower than in 10M-2024, dragged down mainly by real estate investment (-10.4% y/y in 11M-2024). Commodity retail sales growth normalised to 2.8% y/y from 5% in October after a boost due to the early start of the online shopping festival and the National Day holidays. The surveyed unemployment rate stayed at 5% for a second straight month."
"October and November data suggests that economic growth momentum accelerated from Q3. The authorities have shown confidence recently in meeting this year’s annual growth target of around 5%. The Politburo meeting and Central Economic Work Conference (CEWC) set a pro-growth policy stance for 2025, with a wider fiscal deficit and looser monetary policy. We maintain our 2025 growth forecast at 4.5%, as we expect stimulus to partially offset higher tariffs."
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