Chinese consumers pull back, but other indicators stabilize

Government blamed the deceleration on consumers holding off from making purchases until Singles Day, China’s annual discount shopping bonanza. (AFP)
Updated 14 November 2018

Chinese consumers pull back, but other indicators stabilize

  • Retail sales slowed to an 8.6 percent year-on-year increase in October
  • The NBS blamed the deceleration on consumers holding off from making purchases until Singles Day

BEIJING: Chinese consumer spending slowed in October, official data showed Wednesday, adding to worries over the world’s second-largest economy, but investment and industrial production appeared to stabilize.
Concerns about China have increased in recent months after third-quarter growth came in at its slowest pace in nine years, and as trade frictions with the US have ratcheted upwards.
Chinese officials are currently engaging with their US counterparts as the two economic giants try to work out a compromise on trade ahead of President Xi Jinping’s meeting with Donald Trump later this month at the G20 gathering.
The National Bureau of Statistics said on Wednesday that retail sales slowed to an 8.6 percent year-on-year increase in October, slightly short of estimates and down from 9.2 percent in September.
The NBS blamed the deceleration on consumers holding off from making purchases until Singles Day, China’s annual discount shopping bonanza that was held on November 11.
“Given uncertain and unstable factors abroad, there are concerns over the slower though stable economic development which is facing downward pressure,” bureau spokeswoman Liu Aihua told a news briefing.
“The world economy and trade growth momentum have weakened while international financial markets have been turbulent.”
Exports to the major US market have held up so far but analysts forecast a dimming picture in the months ahead, reinforcing the need for China to rely on its legions of domestic consumers to grow the economy.
The trade row with the US has sapped market confidence, dragging down Chinese equities and the yuan currency.
On the positive side, fixed-asset investment, a key economic driver, showed signs of rebounding.
It expanded 5.7 percent on-year for the first ten months of the year, picking up after hitting record lows this summer as Beijing’s push to get big projects moving this autumn lifted infrastructure spending.
Output at factories and workshops ticked up 5.9 percent in October, an improvement on the 5.8 percent in September, according to the NBS, and ahead of the 5.8 percent forecast in a Bloomberg News survey.
“Despite the uptick in industrial output and investment, we doubt that economic growth has bottomed out just yet,” Julian Evans-Pritchard of Capital Economics wrote in a research note.
He said local governments had held off on issuing bonds in recent weeks as they face budget limits.
“US tariffs have, if anything, acted as a prop to exports recently (due to front-loading by US importers) but are set to become a drag early next year,” he said.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

Opinion

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.