According to the Intesa Sanpaolo Study Centre, l GDP Chinese during del third quarter 2017 it recorded an increase of 6,8%, while in the following three months the increase, according to reports from the National Bureau of Statistics in Beijing, was 6,9%.
On the supply side it is emphasized still high dynamics in the transport sector and an acceleration in the financial services sector, while the real estate sector continued to slow down together with the construction sector. Here then is that analysts review up economic growth relating to the whole 2017 equal to 6,9%. In this context, the latest monthly data recorded a moderate slowdown in activity between August and November, with the performance of the service sector and industries related to new technologies remaining better than that of heavy industry. Business and consumer confidence continued to rise, the first driven upwards by the increase in profits and turnover and the second supported by the good performance of the labor market.
In recent months, the Authorities have continued to issue new regulations to reduce systemic risk in various areas of the banking and non-banking financial sector. In mid-November the Committee for Development and Financial Stability, with a role of coordination of monetary, fiscal and economic policies, and a ministerial level higher than the various competent Authorities and the Central Bank. The control of financial risk will therefore remain among the highest priorities of regulators also in 2018, together with environmental protection and the quality of growth, i.e. the well-being of citizens and the distribution of wealth. Hence, according to analysts, the growth target for 2018 could therefore be slightly lowered to the 6-6,5% range.
The main bank appears to have adopted a monetary policy stance with a longer-term horizon through greater use of medium-long term refinancing operations and the announcement three months in advance of a selective cut in the compulsory reserve rate. It is believed that during 2018 the PBoC will maintain monetary policy stance essentially unchanged, providing an adequate level of liquidity to the market but maintaining moderately higher rates than last year, particularly on longer maturities. The intention, reaffirmed by the Authorities, to limit the rise in house prices and, more generally, to contain financial risks, heralds moderately higher rates in the coming quarters and a slowdown in credit which will progressively remove support for investments. Analysts expect that investment in public infrastructure and services, on which the government continues to focus, will not be able to fully compensate for the deceleration in investment in the real estate and manufacturing sectors. Here then is that promises a scenario of moderate slowdown in economic growth to 6,4% in course this year and at 6,2% in 2019.
GROWTH CONTINUES IN INDIA TOO
At the same time, during the third quarter of 2017 ithe GDP Indian è accelerated al 6,3%, when the deceleration in consumption was offset by a moderate recovery in investments and the accumulation of inventories, while exports provided a negative contribution to growth. On the supply side, there is a rebound in value added in the industrial sector, a slowdown in the agricultural sector and still high growth, albeit slightly slowing down, in the services sector. Monthly macroeconomic data have reported a further improvement in the manufacturing sector and a still good but less rosy situation than in previous quarters in the services sector. In fact, consumer confidence remains in the pessimistic zone (below 100) and at its lowest level since the beginning of 2014: i consumers complain of a worsening of the general economic situation and of the labor market, even if spending intentions remain on the rise. Consumer price inflation rose from 3,3% in August to 4,9% in September, driven upwards mainly by increases in food prices and fuel and electricity prices. Analysts expect inflation to average 3,3% in 2017 and rise to 5% in 2018 while staying within the central bank's target range.
The current account balance deteriorated slightly in course of the third quarter (1,4%), due to a greater deficit in the trade balance determined by the greater increase in imports compared to exports, especially of goods. The still weak performance of foreign orders and the expected recovery of domestic demand together with the increase in the price of oil could lead to a further limited increase in the coming quarters, bringing investors' attention back to the "twin deficits”, i.e. the correlation between the government deficit and that of the current account. In this context and with inflation on the rise, analysts believe that the Central Bank it will keep rates steady over the next few quarters, with a possible rise in the second half of this year, and with further reforms to favor the transmission of monetary policy to bank rates.
I downside risks on the performance of the agricultural sector and consumption lead to maintain growth forecasts for the year 2017 to 6,4%, with a scenario of moderate acceleration of GDP growth to 7,2% this year and 7,4% in 2019 thanks to the support of fiscal policy and a slow recovery in investments favored by the long-term effects of the reforms implemented in the last few years.
