BNP Paribas: «First Centurial Objective» Missed
Whilst the 6.8 percent contraction beat BNP Paribas’ forecast of minus 8.4 percent, the bank underlined a sizeable gap between output and real demand, attributing this to medical production and inventory replenishment or increases. The bank warns of dampened industrial output recovery and worsening job losses to come, highlighting fiscal policy as key to offset headwinds.
«We expect Q2 growth to improve but face lots of headwinds,» the bank added.
«The current growth momentum and poor short-term prospects suggest, in our view, that it is almost impossible for the government to achieve the so-called first centurial objective – to double GDP and GDP per capita by 2020 on the 2010 base and to eliminate the absolute poverty.»
Citi Private Bank: Trade-Dependent Acceleration
Whilst global policy stimulus has moved markets into the recovery phase, the economy continues to face headwinds and its recovery is «more likely than not to lead to a slow normalization» according to Citi Private Bank’s head of Asia investment strategy Ken Peng in an investment note.
«We expect China’s recovery to continue gradually in April, but it is dependent on trade to see future acceleration,» Peng added. «We do, however, expect greater investment by China to stimulate its economy as it becomes clearer that export growth will be restrained.»
The bank nonetheless expects China to lead large economies as the economic winner of 2020, forecasting 2 percent growth compared to a 4.3 percent decrease in the U.S. and a dire 8 percent decrease in Europe. The bank forecasts global GDP to contract 3 percent in 2020.
