**As seen in Risk In The Week report, 05/10/24, subscribe at cablefxm.co.uk/reports
China industrial output rose 4.5% Y/y in March, this missed the consensus estimate of 6.0%. The release came in with 1Q GDP figures topping projections at 1.6% Q/q and 5.3% Y/y, however, private demand continues to lag showing continuous structural challenges in the Chinese economy. March retail sales rose 3.7% Y/y, this pace was below the expected 4.8%. Economists have recently revised their China retail sales projections higher, they are calling for a pace of 5.2% Y/y vs a prior 5.1%.
Looking at the details, the prior monthly softness came from electricity production and electric machinery equipment production, said analysts at J.P. Morgan. The desk expects April data to show solid momentum, they pencil in industrial production rising 0.4% M/m and 7.5% Y/y. J.P Morgan points to activity surveys showing strong data in April, the NBS manufacturing PMI reached the highest level in 13 months. Economists at Wells Fargo Securities point to demographics and property sector challenges acting as headwinds on Chinese growth. Wells Fargo expects China GDP to ease to 5.1% in 2024 before slowing to 4.3% next year.
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