ANZ tips 6.9% growth for China in first quarter on sluggish trade data

April 14, 2015

HONG KONG – With extremely weak import growth suggesting that China’s Q1 GDP growth could have fallen below 7.0%, ANZ Bank is forecasting China’s economy to grow 6.9% in Q1 2015, possibly one of the lowest in six years.

China's exports declined sharply - by 14.6% - in March, after surging 48.9% in February. “While sharp slowdown in export growth could be due to a front-loading effect before Chinese New Year, the overall China’s trade growth has been sluggish,” ANZ says.
“By geography, shipment to the US, EU and Japan fell by 8.0%, 19.1% and 24.8% in March respectively, down from a positive growth of 48.5%, 44.1% and 23.6% in the prior month.
Imports registered weak growth, declining by 12.3% in March, from -20.1% in the prior month, suggesting that the domestic demand remains extremely soft. “Notably, the drop of commodity prices has dragged the import value as well,” ANZ says. “For instance, iron ore imports declined sharply by 43.2% y/y in value terms in March, but registered a 9.3% gain in volume term.”
The trade surplus narrowed significantly to RMB18.2bn (USD3.1bn), from RMB370.5bn in February (USD60.6bn). www.live.anz.com (ATI).