The marginally stronger-than-consensus Q1 GDP data and broad stability in March growth figures suggest that concerns over the state of China’s economy are overdone. The economy is likely to weaken further on the back of slowing credit and property investment. However, with consumption holding up relatively well, export demand warming and infrastructure investment possibly bottoming out, a sharp slowdown should be avoided. This makes the stimulus that many are expecting less likely. Our forecast for this year’s GDP growth remains unchanged at 7.3%.
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