Strong export performance helps China avert sharp fall in Q3 GDP

HONG KONG - China’s third quarter GDP growth came out at 7.3% y/y, slightly down from 7.5% y/y in the previous quarter while above market expectations. In sequential terms, Q3 GDP expanded at a pace of 1.9% q/q sa, decreasing from 2.0% q/q sa in Q2.

BBVA Bank says the downtrend of the economy is mainly due to a persistently sluggish property market as well as its adverse spill-over effects to other related sectors, as evidenced by the significant dip of August industrial production. Nevertheless, a surprisingly strong performance in the export sector helped avert a sharp fall in Q3 GDP.

“In the meantime, the authorities reported a number of activity indicators including industrial production, fixed asset investment and retail sales in September, consistent with a moderating trend in the economy,” BBVA says. “Given the better-than-expected outturns in Q3, we slightly revise our Q4 GDP projection up to 7.2% y/y from 7.0% y/y. As a consequence, our full-year projection of 2014 rises to 7.3% from 7.2% previously.” www.bbvaresearch.com (ATI).