The downward trend of economic growth in 2018 has not continued into the first quarter of this year.
On April 17, the National Bureau of Statistics data showed that the preliminary calculations showed that the GDP in the first quarter of this year was 21.34 trillion yuan, a year-on-year increase of 6.4%. The growth rate of 6.4% was the same as that of the fourth quarter of last year.
In March, industrial production accelerated significantly, investment and consumer demand rebounded, and the economic growth rate in the first quarter stabilized at 6.4%, which was higher than market expectations and showed a warming trend.
Mao Shengyong, spokesperson of the National Bureau of Statistics, said at the press conference of the State Council that the positive factors of economic operation are gradually increasing, and the market is expected to improve significantly. Many policies will be implemented and effective, and the foundation for smooth economic operation will be consolidated. But the pressure of economic downturn still exists.
The steady growth policy will continue to fall. Recently, the National Development and Reform Commission is seeking advice on promoting the renewal of consumption of automobiles, home appliances and consumer electronics products, and the policy of promoting consumption is expected to advance. However, on April 17, the central bank reduced its MLF and the monetary policy has a marginal tightening trend.
March economic data is eye-catching
The economic operation in March exceeded expectations, the most obvious is the industrial production data. In March, the added value of industrial enterprises above designated size increased by 8.5% year-on-year, a sharp increase of 3.2 percentage points compared with January-February.
Although it was not as fast as industrial production, the growth rate of consumption and investment in March has rebounded. For example, the total retail sales of consumer goods in March increased by 8.7% year-on-year, 0.5 percentage points higher than the growth rate of the previous two months. From January to March, the national fixed asset investment (excluding farmers) increased by 6.3% year-on-year, and the growth rate was 0.2 percentage points higher than that in January and February.
The rebound in production and demand in March will stabilize the GDP in the first quarter at 6.4%. At the same time, employment, prices, income growth, foreign trade and other indicators have performed well. For example, in the first quarter, the per capita disposable income of the national residents actually increased by 6.8%, 0.2 percentage points higher than the same period of the previous year, and also outperformed the current GDP growth. speed. The trade situation is also improving. In the first quarter, the total import and export volume of goods increased by 3.7% year-on-year, and the growth rate was 3.0 percentage points higher than that in January and February.
Mao Shengyong pointed out that in the fourth quarter of last year, a series of "six stable" policies, at the beginning of this year, a series of policies to expand effective investment and expand household consumption, the policy of reducing taxes and fees during the two sessions of the country continued to fall, and the Sino-US economic and trade consultations released A lot of positive signals, etc., the accumulation of policy effects, market confidence, corporate expectations are improving significantly. In addition, the Spring Festival misplacement factor has a pull-down effect on the January-February data, and has a pull-up effect on the March index.
Mao Shengyong further pointed out that if the Spring Festival factor is removed, the economic indicators in the first quarter of this year are basically the same as or slightly faster than the fourth quarter of last year. Compared with the same period of last year, most of the indicators fell slightly.
Luo Zhiheng, a senior researcher at Evergrande Economic Research Institute, told reporters of the 21st Century Business Herald that the March index was accelerating, mainly for three reasons: first, the positive fiscal and monetary policies of the counter-cyclical system; second, the tax reduction and reduction, Under the influence of internal and external factors such as the progress of the US trade negotiations, investment and consumer confidence have all recovered; the third is related to the short-term inventory cycle, from active destocking to passive destocking, slowing down the economy and entering the recovery phase. .
Economic downside pressure remains
Last year, the growth rate of total retail sales of consumer goods in general showed a downward trend. The outside world believed that it was related to the increase in the debt ratio of residents. Consumption as a slow variable, the market believes that its downside is long-term.
Most of the consumer categories in March were picking up, and consumption of household appliances and audio-visual equipment, furniture, construction and decoration materials increased rapidly, and the growth rate rebounded significantly.
“The growth rate of 8.3% of total retail sales of consumer goods in the first quarter was not high in history, but it ended the downward trend. The reason behind this is that the income of residents in the first quarter actually increased by 6.8%, higher than the growth rate of the same period last year and the whole year. The wealth effect of the stock market also has a partial effect; the economy stabilizes, the unemployment rate declines, the income is expected to improve, and consumer confidence is improved. Because of the downward trend in exports, the market worried about employment at the end of last year, but the employment situation in the first quarter was generally good." Luo Zhiheng pointed out.
However, as a major consumer category, automobile consumption fell by 4.4% in March, an increase of 1.6 percentage points from the previous two months. According to statistics from the Bureau of Statistics, the decline in automobile production in March narrowed, and the value added of the automobile manufacturing industry in March turned from negative to positive. Although the production of automobiles has rebounded, the price war between automakers and the fall in car prices have caused the car consumption to remain negative.
Luo Zhiheng pointed out that household appliances, furniture, decoration and other real estate-related consumption, led to a rebound in consumption in March, which is related to the rebound in real estate sales. The rebound in CPI in March led to a rebound in consumption of grain, oil and oil.
As for the trend of consumption, Luo Zhiheng believes that the value-added tax, the effect of tax reduction and tax reduction, the implementation of the “stable automobile consumption†policy and the continued improvement in consumer expectations, etc., will continue to rise steadily, but the leverage ratio of the resident sector is higher. Will inhibit the rapid growth of consumption.
Mao Shengyong believes that after a period of adjustment, the decline in production and sales of automobiles may further narrow.
The growth rate of investment in March was mainly driven by real estate and infrastructure investment, but the growth rate of private investment and manufacturing investment declined.
“Real estate control policies have become marginalized due to urban policies, and market activity has increased in some regions. At the same time, large-scale urban settlement policies have loosened considerably, which has helped real estate investment to maintain growth. Financial funds were issued ahead of schedule, and a large number of projects have been issued since the beginning of the year. Focusing on construction, promoting the growth rate of infrastructure investment to rebound to 4.4%. The growth rate of manufacturing investment slowed to 4.6%, indicating that manufacturing demand is still weak, and industrial production acceleration has not been transmitted to manufacturing investment.†Bank of Communications Financial Research Center Senior researcher Liu Xuezhi said.
Luo Zhiheng pointed out that private investment and manufacturing investment have declined, indicating that the economy has stabilized but is not strong, and confidence has increased but it has not expanded. The decline in private investment has been slowed down since the second half of last year. PPI and corporate profit growth have been declining. With the implementation of tax cuts, price increases, and wide credits, private investment and manufacturing investment are expected to rise.
"Overall, investment may rise slightly in the future. This year's monetary policy is more lenient than last year, social financing scale growth is higher, and medium and long-term loans are increasing, indicating that corporate investment will increase. However, the main body of investment is still real estate and Infrastructure construction cannot be neglected by structural adjustment and institutional reform due to steady growth," Luo Zhiheng said.
Should the steady growth policy be adjusted?
The economic growth rate in the first quarter was steady at 6.4%. Whether it is really stable, the market has different judgments.
Liu Xuezhi believes that with the increase of positive factors, the economic growth rate in the second quarter is expected to accelerate slightly. Considering that the economic growth rate has stabilized in the first quarter, the effectiveness of the counter-cyclical adjustment policy will continue to be released, and the external environment may continue to improve. The annual economic growth rate is expected to fall below the upper limit of the target range of 6%-6.5%. As there are still some uncertainties inside and outside, the future economic growth rate will be relatively limited.
Luo Zhiheng believes that the initial judgment of the economy to stabilize, whether it is really stable depends on the second quarter. There is still uncertainty in the economy, especially the uncertainty of external demand is relatively large. We expect to maintain a growth rate of 6.4% in the second quarter, a low in the first and second quarters, and the trend for the whole year is “before low and stableâ€.
The follow-up policy trend, the market has different analysis, but the expectations of monetary policy have been tightened compared to before.
"Before we expected the economic operation to stabilize until the second quarter, now we look at the counter-cyclical control policy to be effective early. Based on the fact that the current economy is stable, we will consider that the price level has rebounded significantly, although monetary policy should adhere to counter-cyclical adjustment. But there is no need to further increase the code," Liu Xuezhi pointed out.
Guotai Junan macro team pointed out that the outlook is follow-up, the current wide credit force is faster than expected, and the economic growth rate is also stable. It is expected that the central bank will not need to cut interest rates during the year. Our expectation of the number of RRR reductions will be lowered from 3-4 times to 1-2 times. Today The central bank will continue to renew the MLF, and there is no possibility of a RRR cut in the short term.
Luo Zhiheng said that the economy has just recovered and the policy cannot be tightened immediately. Otherwise, it will be abandoned. It may be in the observation period now, and the situation will remain the same, it will not be looser than it is now, and it will not be tighter than it is now. The central authorities also need to observe for a while.
At the press conference of the State Council, Mao Shengyong did not respond positively to whether the steady growth policy has weakened. Mao Shengyong pointed out that the policies we have introduced now have been more numerous. The most important thing is that all regions and departments must implement the major policies and measures promulgated by the Party Central Committee and the State Council in a down-to-earth manner and implement them without compromise. Let these policies be effective, promote the smooth and healthy operation of the Chinese economy, and continue to move toward high-quality development.
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