China’s economy continued its slowdown during the second quarter of 2019, expanding at an annualised rate of 6.2%. The country’s economy grew by 6.4% during the first quarter. According to the National Bureau of Statistics, the data reflected a “complex” domestic and overseas environment.
- South Africa, Brazil and Turkey cut interest rates during July
- Relations between China and the US remained frosty
- The Asian Development Bank downgraded its forecasts for India
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China’s economy continued its slowdown during the second quarter of 2019, expanding at an annualised rate of 6.2%. The country’s economy grew by 6.4% during the first quarter. According to the National Bureau of Statistics (NBS), the data reflected a “complex” domestic and overseas environment as China’s economy faces fresh downward pressure. During the month, the International Monetary Fund (IMF) cut its economic growth forecasts for China from 6.3% to 6.2% in 2019, and from 6.1% to 6.0% in 2020.
“China’s economy faces fresh downward pressure”
US President Donald Trump was quick to attribute China’s continued slowdown to its role in the trade dispute between the two countries, tweeting: “China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The US Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries … This is why China wants to make a deal”.
On a more encouraging note, China’s industrial production picked up in June, rising at an annualised rate of 6.3%, compared with May’s rise of 5%. Growth in retail sales also appreciated, climbing at an annualised rate of 9.8%. The Shanghai Composite Index fell by 1.6% during July.
The Asian Development Bank (ADB) downgraded its inflation forecasts for India from 4.3% to 4.1% in fiscal 2019, and from 4.6% to 4.4% in fiscal 2020, citing a strengthening rupee and slowing economic growth. The ADB reduced its prediction for economic growth in fiscal 2019 from 7.2% to 7%, highlighting 2018’s unexpectedly weak fiscal outturn. The ADB regards the trade war between the US and China as the main risk to the region’s economic prospects.
India’s rate of consumer price inflation edged higher during June, climbing from 3.05% in May to 3.18%. Inflationary pressures have been dampened recently by subdued food-price inflation. The Reserve Bank of India (RBI) has an inflation target of 4%, within a range of 2-6%. The CNX Nifty Index fell by 5.7% over July.
South Africa’s central bank cut its key interest rate by 0.25 percentage points to 6.5% during July in a bid to boost flagging economic growth. Turkey also cut its interest rate from 24.50% to 19.75% – a record reduction of 4.75%. Elsewhere, Brazil’s central bank cut its Selic rate by half a percentage point to 6%. The IMF slashed its forecast for Brazil’s economic growth this year from 2.1% to 0.8%.
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