Global Courant 2023-05-09 08:50:57
QINGDAO, CHINA – MAY 06: Aerial view of illuminated Qingdao Qianwan Container Terminal at dusk on May 06, 2023 in Qingdao, Shandong province of China.
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Chinese exports grew 8.5% in US dollar terms in April, a second straight month of growth, while imports fell 7.9% year-on-year.
Economists polled by Reuters estimate that exports would rise 8% in April, while imports would remain unchanged. In March, imports fell 1.4% year on year, while exports made a surprising jump of 14.8%, government data showed.
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China’s trade surplus grew to $90.21 billion in April, compared to the surplus of $88.2 billion in March.
Softer April trade data likely reflects “residual seasonality” after this year’s Lunar New Year, Goldman Sachs economists said in a Monday note.
Economists at Goldman Sachs expected “this seasonal tendency to slow export growth in April to dissipate,” they wrote in a note earlier this month looking ahead to China’s trade data.
Recent economic data from the world’s second-largest economy showed that China’s services sector remained a bright spot despite disappointing factory data.
The Index of purchasing managers of the National Bureau of Statistics reading missed expectations and fell into contraction territory with an April reading of 49.2 from March’s reading of 51.9.
“China has passed its fastest phase of reopening,” Goldman Sachs economists wrote in a separate note Friday. It reiterated its forecast that China’s economy will grow at a full-year 6% in 2023.
“Recent meetings with mainland clients indicate gradually waning pessimism about near-term growth, but some concerns about deflationary pressures, although we don’t think this is a major risk for 2023-24,” they wrote.
Inflation ahead
China’s inflation data will be released on Thursday. According to a Reuters poll, economists expect inflation to have slowed to an annual increase of 0.3%.
Month-over-month, prices are predicted to remain flat, according to the survey.
The economy’s producer price index is expected to mark its seventh straight month of declines after falling 2.5% in March. Economists polled by Reuters expect a fall of 3.2%.
“Central bankers in China appeared to have little concern about deflation, judging by the PBoC’s quarterly monetary policy reports and minutes,” BofA Global Research economists, including Helen Qiao, wrote in a note, adding that officials appear to be confident. in a pick-up in coming inflation.
BofA economists said they “expect inflationary pressures to rise as the output gap narrows in 2H23, particularly as a result of a new credit cycle kicking off.”
