Still waiting for stimulus to be felt

The data for the first two months of the year were in general downbeat. Everything from imports to electricity and cement production slowed. Still, Q1 was always likely to be weak. Policy loosening only got underway in early December when the first required reserve ratio cut was introduced, and policymakers seem only to have committed themselves wholeheartedly to easing monetary conditions in the last few weeks. We think that GDP growth may slow to 8% y/y this quarter, compared with 8.9% in Q4, but then rebound slightly in Q2.