Jan 21, 2019 08:51 PM

Caixin View: China GDP Report Offers Only Temporary Relief

*We see the slowdown continuing into the first two quarters of 2019, but then expect GDP growth to show a slight acceleration as fiscal stimulus measures like tax cuts start to kick in

* Industrial output gains should be treated with caution as last year’s strict winter production curbs present a low base for comparison

(Beijing) — Official data released Monday show that China's GDP grew 6.6% in 2018, in line with our expectations and marginally exceeding the official target of "around 6.5%.” It was the weakest annual growth since 1990 and down from a revised 6.8% pace in 2017. The National Bureau of Statistics (NBS) also reported that fourth-quarter GDP slipped to 6.4% year-on-year, the third successive decline and the slowest rate since the first quarter of 2009. The usual caveats apply surrounding the accuracy and reliability of China’s economic reports, and these latest numbers continue to show an extraordinarily smooth slowdown, especially given the ample anecdotal and data-based evidence that the economy is losing momentum at a far greater speed.

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