Goldman Sachs China: April Activity Data Missed Expectations Broadly
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Goldman Sachs reports that China's April economic activity data broadly undershot market expectations across multiple key indicators, signaling that the recovery's momentum is moderating and that additional policy support may be necessary. Industrial production rose 5.6% year-over-year, below the 6.0% consensus, with month-over-month growth of just 0.3%. Fixed asset investment grew 4.2% cumulatively, missing the 4.5% forecast, as manufacturing investment increased 6.5% and infrastructure spending rose 5.0%, while property investment declined 9.8%.
Retail sales expanded 3.1%, short of the 3.8% expectation, with catering revenue up 4.2% and merchandise sales rising 2.9%. Exports grew 1.5% versus a 2.0% forecast, and imports fell 0.5%, reflecting soft domestic and external demand. The surveyed unemployment rate edged up to 5.3% from 5.2% in March, with youth unemployment remaining elevated. Credit figures also disappointed, as new RMB loans reached 1.1 trillion yuan against expectations of 1.3 trillion, and aggregate social financing totaled 1.5 trillion yuan versus the 1.8 trillion forecast.
April CPI rose 0.3% year-over-year while PPI declined 2.5%, indicating persistent deflationary pressure. Goldman maintains its 2025 GDP growth forecast of 5.0% but notes rising downside risks, expecting potential policy easing through reserve requirement ratio cuts, rate reductions, and increased fiscal spending.
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