Chinese Premier Wen Jiabao said the country’s economic situation last quarter was “relatively good,” a signal today’s report on gross domestic product may show the country’s slowdown ebbing.
“China’s economic growth has started to stabilize,” the official Xinhua News Agency said yesterday, citing Wen’s comments in meetings he held with industry leaders, company executives and some local government officials on Oct. 12-15. The government is confident of achieving annual targets and the economy will continue to show “positive changes,” Wen said, according to Xinhua.
Exports exceeded forecasts in September and money supply grew at the fastest pace in 15 months. Even so, economists forecast today’s data will show growth in the world’s second-biggest economy decelerated for a seventh quarter, putting pressure on the ruling Communist Party to add stimulus ahead of a once-a-decade leadership transition.
“Wen’s comments suggest that there may be signs of stabilization in the quarter-on-quarter numbers, which give a better sign of current momentum in the economy,” said Mark Williams, Asia economist at Capital Economics Ltd. in London. “GDP growth in the third quarter almost certainly slowed in year-on-year terms. Policy makers at this point want to focus on more forward-looking indicators, which indicate the economy may now be turning the corner.”
The MSCI Asia Pacific Index of stocks rose for a third day, gaining 0.5 percent at 9:44 a.m. in Tokyo.
Wen has refrained from easing monetary policy since cutting interest rates in June and July.
Gross domestic product probably expanded 7.4 percent in the July-September period from a year earlier, based on the median estimate in a Bloomberg News survey of 43 economists. The economy grew 7.6 percent in the second quarter. The government will also report September data for industrial production and retail sales and January-to-September figures for fixed-asset investment.
The National Bureau of Statistics is scheduled to issue its report at 10 a.m. in Beijing today.
China “still faces considerable difficulty in the last quarter,” Xinhua reported, citing Wen.
Williams estimates third-quarter GDP grew 1.8 percent from the second quarter, equal to the previous pace and showing what he said is the “faintest of pickups” toward the end of the period. The economy may have expanded 7.1 percent in the period from a year earlier, Williams said.
“Policy has been loosened gradually during the course of this year and we are expecting that to feed slightly higher investment growth over the next few months,” Williams aid. “But we think that this is going to be a very small pickup in growth.”