Economic data of China in coming weeks is forecasted to indicate activity moderate in April after a robust result in March, adding to questions over whether the world’s second biggest economy is recovering.
Growth in bank loans and industrial output is anticipated to ease, while exports could plunge, albeit marginally, after expanding for the first time since March.
Fixed asset investment may have expanded at a faster rate, but while producer price deflation likely reduced, easing strains on firms’ balance sheets.
April will provide market players their first look at the state of the economy after the first quarter, which has been volatile, when data can be distorted by the long Lunar New Year holidays.
March readings, which were stronger than expected, and a rise in prices of raw materials including steel had sparked hopes that the country’s ongoing economic slump was weighing and business conditions were recovering.
Economic activity climbed on the back of record bank lending in the first quarter.
However, concerns over a speculative commodity bubble and fast surging home prices, as well as spread debt defaults and terrible loans, have for now led regulators to hit the brakes on anticipations for stronger boosting.
Chinese banks extended nearly 900 billion yuan in new yuan loans in April, dropping steeply from 1.37 trillion yuan in March.
According to a market analyst, “We think the momentum of policy easing has peaked in the near term. We expect Chinas policy stance to remain largely unchanged in the next couple of months, with Q2 data release and Julys politburo meeting as the next potential opportunity to revisit current policies.”
Industrial is seen to jump 6.5 percent, lower than the 6.8 percent spike in March, but higher than recent months, while elevated government spending on construction projects has stimulated a recovery in production of steel and other building materials.
Consumer inflation may have hit the highest levels since May 2014. Market economists forecasted a 2.4 percent increase in the consumer price index, though that would be slightly higher than 2.3 in March and below the government’s 3 percent goal.