Just 15 days after the quarter ended, one of the most divisive and closely watched data releases for financial markets is about to be released: China GDP.
While it now tends to have less market impact than was once the case — largely due to mistrust in the legitimacy of the data presented — it still has the power to see markets roil or rejoice given its standing as the second-largest economy on the planet.
Here’s the state of play.
- In the March quarter the economy grew by 6.7% year-on-year, marking the slowest expansion seen since the March quarter of 2009, the depths of the global financial crisis.
- According to the National Bureau of Statistics, the preliminary estimate for GDP was 15,852.6 billion yuan for the quarter, or around $US2.44 trillion.
- Growth across China’s tertiary industries – predominantly services – increased by 7.6% to 9,021.4 billion yuan, outpacing growth in the nation’s secondary (5,951.0 billion yuan) and primary industries (880.3 billion yuan) of 5.8% and 2.9% respectively.
- This reflects the economy’s transition towards growth powered by services and consumption, rather than past linchpins such as industry, investment and trade.
- According to a survey of 61 economists polled by Thomson Reuters, economic growth is expected to slow to 6.6% year-on-year in the June quarter. Forecasts range from 6.3% to 6.8%.
- The GDP figure has a curious knack of coming in around market expectations. The past six have either been in line with forecasts or exceeded them by 0.1%. Make of that what you will.
- After seasonal adjustments, a quarterly growth figure of 1.6% is expected. Forecasts offered to Thomson Reuters range from an increase of 1.1% to 1.9%.
- Alongside the GDP release, the NBS will also release industrial production, retail sales and urban fixed asset investment figures for June.
- The fixed asset investment figure, in particular, is likely to garner more attention than normal given the acceleration in state-backed infrastructure investment seen in recent months. From June 2015, it’s expected to grow by 9.4%, down from 9.6% seen in May.
- Over the same period industrial output is tipped to grow by 5.9%, down from 6.0% in May, while retail sales is expected to remain unchanged at 10%.
- If the prior quarter GDP report is anything to go by, the People’s Bank of China is also likely to release monetary figures for June including M2 growth, new bank lending and total social financing.
The data dump, presuming that it won’t be delayed like China’s international trade report earlier this week, is scheduled to arrive at Midday AEST.
Business Insider will have full coverage as soon as the data drops.