Wilson Bennett Says PBOC - China’s Economy To Pick Up In 2nd Half

Wilson Bennett: China’s central bank has forecast an uptick in the country’s economic fortunes in the 2nd half of 2015.

Online PR News – 02-July-2015 – Osaka-fu, Japan – According to Wilson Bennett, stabilizing home prices and stronger foreign demand for Chinese goods will help drive an uptick in the world’s second biggest economy in the 2nd half of 2015. So say economists at the People’s Bank of China (PBOC) in a report posted on the central bank’s website.

The upbeat prediction came even as the same economists said they had cut their 2015 inflation forecasts for China to 1.4% from 2.2% and cited several other headwinds facing the economy. May’s inflation data came in lower than expected registering CPI of 1.2% against expectations for 1.3%. The data sparked speculation that subdues inflation meant the PBOC would have more scope to provide stimulus.

“That typically conservative economists at the PBOC should suggest an economic uptick is likely to begin in the 2nd half suggests they must be convinced that the central bank will deliver further interest rate cuts and other stimulus measures as the year progresses,” said Nadine Schuler, who heads Global Markets Research at Wilson Bennett.

Wilson Bennett says it is largely in agreement with the economists’ forecasts on the efficacy of further monetary stimulus but remains unconvinced of their timetable for improvement in the economy.

“Official forecasts in most countries that have or have had property booms always tend to be over-optimistic as to when prices will stabilize. Corrections in real estate bubbles often overshoot as much on the way down as they do in the opposite direction so we won’t be holding our breath,” added Schuler.

The firm says it does not envision a significant reversal in demand from China’s major trading partners in the EU and the US but says that demand from ASEAN (Association of Southeast Asian Nations) countries should remain buoyant over the short to medium term.
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