Back
14 Apr 2015
China’s exports unexpectedly plunge in March - Nomura
FXStreet (Bali) - The Asian Economics Team at Nomura breaks down their analysis on Monday's huge Chinese trade balance miss, maintaining the view that GDP growth will slow to 6.9% y-o-y in Q1 2015 from 7.3% in Q4 2014.
Key Quotes
"Exports fell sharply by 15% y-o-y in March after a surge of 48.3% in February, while market watchers expected continued, albeit lower, growth (Consensus: 9.0%; Nomura: 4.0%). The rate of decline in import growth eased to -12.7% y-o-y from -20.5%, but was below market expectations (Consensus: -10.0%) but largely in line with our forecast (Nomura: -12.0%). The result was a significantly smaller trade surplus of USD3.08bn after a record high USD60.6bn in February."
"The 48% y-o-y surge in exports in February was seasonally biased up by the lunar new year holidays, but abstracting from this by averaging the January-February data puts underlying export growth at 15.1% in the first two months of 2015. From this vantage point the 15% drop in March looks very weak. For Q1 as a whole, export growth slowed to 4.7% y-o-y from 8.6% in Q4 2014, constrained by weak foreign demand and China’s appreciating real effective exchange rate. Import growth fell in Q1 to -17.6% from -1.8%, due to lower commodity prices and weak domestic demand."
"We maintain our view that GDP growth will slow to 6.9% y-o-y in Q1 2015 from 7.3% in Q4 2014 and to 6.8% in 2015. We also continue to expect more policy easing to offset headwinds to economic growth, with three more interest rate and bank reserve requirement ratio cuts over the rest of 2015."
Key Quotes
"Exports fell sharply by 15% y-o-y in March after a surge of 48.3% in February, while market watchers expected continued, albeit lower, growth (Consensus: 9.0%; Nomura: 4.0%). The rate of decline in import growth eased to -12.7% y-o-y from -20.5%, but was below market expectations (Consensus: -10.0%) but largely in line with our forecast (Nomura: -12.0%). The result was a significantly smaller trade surplus of USD3.08bn after a record high USD60.6bn in February."
"The 48% y-o-y surge in exports in February was seasonally biased up by the lunar new year holidays, but abstracting from this by averaging the January-February data puts underlying export growth at 15.1% in the first two months of 2015. From this vantage point the 15% drop in March looks very weak. For Q1 as a whole, export growth slowed to 4.7% y-o-y from 8.6% in Q4 2014, constrained by weak foreign demand and China’s appreciating real effective exchange rate. Import growth fell in Q1 to -17.6% from -1.8%, due to lower commodity prices and weak domestic demand."
"We maintain our view that GDP growth will slow to 6.9% y-o-y in Q1 2015 from 7.3% in Q4 2014 and to 6.8% in 2015. We also continue to expect more policy easing to offset headwinds to economic growth, with three more interest rate and bank reserve requirement ratio cuts over the rest of 2015."