China growth likely to have slowed in Q1

SHANGHAI: China’s economy is expected to have slowed in the first three months of the year as it continues to be buffeted by a debilitating property sector crisis and flagging consumer activity.

Beijing officials last month set a target of around five percent growth for the year — a goal they admitted would “not be easy” and which analysts said was ambitious given the headwinds the country is confronting.

But there are some bright spots — figures last month showed industrial production soared even as consumption remained sluggish, reflecting the uneven recovery China has charted since emerging from growth-strangling zero-Covid policies in early 2023.

And analysts said they expected China to post around 4.6 percent growth in the year’s first quarter Tuesday, down from 5.2 percent in the final three months of last year.

Analysts polled by Bloomberg expect it to come in at 4.8 percent.

Woes in the property market remain a millstone for the economy, analysts said, as home prices continued to fall and top developers including Country Garden and Vanke sent out distress signals over their profits and challenges paying off debt.

“Persistent property sector weakness and subdued household consumption, resulting from negative wealth effects from the property correction and somewhat sluggish income growth” will hamper growth, Brian Coulton, Fitch Ratings’ Chief Economist told AFP.

Policymakers have announced a series of targeted measures as well as the issuance of billions of dollars in sovereign bonds in order to boost infrastructure spending and spur consumption.

But analysts say much more needs to be done in the form of a “bazooka” stimulus.

“The stimulus is limited (both monetary and fiscal) so the effect will be limited,” Alicia Garcia Herrero, Chief Economist for Asia

Dan Roces said that decline in remittances from January suggested seasonal fluctuations as well as likely economic headwinds in Filipino host countries.

“Looking ahead, global economic conditions are expected to improve according to the IMF, which means positive employment opportunities for Filipinos

abroad,” he added.

“This also means steady growth and resilience in remittances.”

ING Manila Bank senior economist Nicholas Antonio Mapa, meanwhile, said an increase in the number of new OFWs, along with higher earnings, contributed to the year-on-year remittance growth.

“Remittances remain a stable source of FX (foreign exchange) while also helping deliver peso purchasing power to help drive domestic consumption,” he added.