Dec economic activity steady, says UBS, but growth set to slow slightly in 2018

Source:Xinhua Published: 2018/1/3 22:43:40

UBS expects China's December data to show steady economic activity, while GDP growth in the fourth quarter is expected to have slowed slightly.

The Swiss company predicted stable industrial production and property activity, firm fixed-asset investment (FAI), and faster export growth in a research note on Wednesday. The indicators are scheduled to be released in mid-January.

"We expect December's industrial production growth to have stabilized at 6.1 percent year-on-year," UBS said.

China's value-added industrial output, which measures factory activity, rose 6.1 percent in November, largely stable compared with earlier in the year, as high-tech and equipment manufacturing sectors reported striking increases.

UBS believes stronger external demand and a rebound in power generation will help sustain industrial expansion, while noting the air quality campaign is likely to restrict upstream sectors in North China.

Overall FAI growth is expected to edge up to 6 to 7 percent for December, leaving the year-to-date rate at 7.2 percent, said UBS, adding that infrastructure investment is likely to hold up and manufacturing investment will be slower.

It also predicted robust export growth partly due to a low base, higher consumer prices, retreating factory-gate inflation, and a stable credit increase. Foreign exchange reserves will likely rise thanks to eased capital flight pressures.

UBS projected economic growth would have moderated slightly to 6.7 percent year-on-year in the fourth quarter, and that it will soften further to 6.4 percent in 2018, adding it will be "weighed down by weaker property activity, stricter environmental rules and tighter local government financing."

Posted in: ECONOMY

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