China Q1 GDP data could suggest 2024 growth target of 5% is very ambitious – TD Securities

TD Securities analysts preview the upcoming data releases from China.

Authorities may step up more fiscal action soon

"We expect China industrial production and retail sales to miss to the downside in March despite the seemingly upbeat March PMIs. We pencil in a 5.1% y/y growth in industrial production, below consensus at 6% and tracking the big downside surprise in March exports. The exports outturn suggest that production may retreat as the Lunar New Year distortion fades and underlying production momentum may not be as strong as initially predicted. While March manufacturing PMI jumped back to expansion, it could take some time for manufacturers to translate that optimism into action."

"We also anticipate retail sales to print at 4% y/y (cons: 5%) as the contraction in imports and weak core inflation in March suggest downbeat spending over the month."

"Factoring in our March forecasts, we project Q1 GDP at 4.5% y/y (cons: 5%), which could reignite speculation that China's official 2024 growth target of 5% is indeed a very ambitious target and the authorities may step up more fiscal action soon."