China Plenum continues today – GDP miss yesterday increases calls for stimulus

ICYMI the data from China yesterday, GDP missed estimates, quite badly, for both q/q and y/y. Pundits say that it calls into question China hitting their full-year target of ‘around’ 5%. Which I don’t think will happen, as China ALWAYS hits its GDP target. If you know what I mean.

The third plenum of the Chinese Communist Party’s 20th National Congress continues today, its being held from July 15 to 18. As I posted after the GDP data yesterday:

• China plenum meeting against the background of calls for more economic stimulus

Standard Chartered concur. In brief:

• GDP growth decelerated in Q2 …
• China’s growth drivers remain uneven
• trade tensions are rising, with the US and EU imposing new tariffs on China EVs, and a likely new round of tariffs after the US elections in November

Stan Chart look forward to after the Plenum, and what to expect from the People’s Bank of China later in the year (bolding is mine):

• We expect the Politburo, which is likely to convene in late July, to call for concrete measures to boost domestic demand.
• Ramping up fiscal spending by fully utilising bond issuance proceeds and reducing housing inventory are likely to top the policy agenda
• We forecast a 10bps policy rate cut in both Q3 and Q4, and a 25bps cut in the reserve requirement ratio (RRR) in Q3.

Pan Gongsheng is People’s Bank of China governor

This article was written by Eamonn Sheridan at www.forexlive.com.