Chinese Q2 Growth To Weaken, PBOC To Fix It
According to the Reuters poll, Chinese Q2 growth is likely to have weakened due to trade friction with the US and government’s restrictions. Additionally, credit expansion slumped and domestic demand, including government-funded infrastructure investment and consumer spending started to look rather fatigue. Thus, GDP growth is expected to have reduced to 6.7% in the second quarter compared to 2017.
Lian Ping (chief economist at Bank of Communications) said: "The synchronized slowdown in domestic and external demand is likely to put pressure on economic growth in the second half". The economist also claimed GDP growth is likely to drop to 6.6% in Q3 and remain still in Q4 so that the full-year growth would make up 6.7%.
The People's Bank of China is expected to try to buoy the economy and ease its position on deleveraging. The central bank also promised to keep liquidity "reasonably ample".