The Chinese National Bureau of Statistics released Q3 GDP figures which indicated a quarterly increase of 1.8%, 0.1% higher than expectations. The annual growth rate was 6.9% and slightly lower than the expected 7.0%. It’s the lowest annual result since 2009 and the NBS put it down to “increasing downward pressure of domestic economic development” and a “recovery of the world economy [which] was weaker than expected”.
ANZ’s Warren Hogan did not have a lot to say about the results other than to say the result added to “international market concerns over the integrity of the data.” Noted China watcher, Capital Economics’ Julian Evans-Pritchard said the numbers “will further cement concern over their credibility.” He believes growth in China is far lower than official numbers but regardless appeared to have stabilised.
Westpac zeroed in on the nominal GDP figure which the bank sees as a more reliable gauge of underlying demand conditions. It said the increase in nominal GDP indicates “growth decelerated in a material but not dramatic fashion in the quarter”. The 6.2% increase is down from the 7.1% annual increase reported for the Q2, as well as the revised Q1 figure of 6.6%.
Prior to the GDP release the Chinese government released fiscal revenue and expenditure data which suggested that official expenditure accelerated by a staggering 26.9% in the June quarter. This increase saw spending up 16.4% from the same period in 2014. It would seem abundantly clear that the government is doing its best to support the economy and growth from this stimulus may well flow through in the December quarter.