Osaka Financial Says China's Q2 GDP Surprises To Upside
Osaka Financial says latest GDP data shows China's economy may be stabilizing as efforts to stimulate activity bear fruit.
- (1888PressRelease) September 08, 2015 - Osaka Financial says it remains eminently bullish on the Chinese economy after official data from the country's National Bureau of Statistics showed that gross domestic product (GDP) increased 7% compared with the same period last year; better than broad expectations for a 6.9% expansion.
Data for industrial production showed a 6.8% year-on-year jump in June compared with consensus forecasts for a gain of 6% while June's retail sales rose 10.5% against expectations for a 10.2% increase.
The three-for-three beat on forecasts led to skepticism from analysts and economists who raised doubts as to the veracity of the information.
"This is nothing new," said Kimi Inoue who heads Asia-Pacific markets research at Osaka Financial "China calculates its GDP data in some fairly unorthodox ways and this leads to questions over its accuracy particularly from Western economists."
Concerns over the cooling economy have prompted policy makers to take action. The People's Bank of China has cut interest rates and eased the reserve ratio requirement (RRR) four times since November 2014 amid fears the government's 7% annual GDP target was in danger of being missed.
"We've yet to see if the turbulence in China's mainland stock markets will find their way into the real economy in the form of reduced consumer spending but we're confident the government's actions have put the brakes on any potential spill over," added Inoue.
Osaka Financial says that despite the amounts wiped off stock market valuations, the financial sector still only accounts for a small percentage of China's economy and that, unlike its counterparts in Europe and the United States, the country is unlikely to fall into a crisis just on the strength of a sharp correction in equities.
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