UBS expects China's growth recovery to continue in Q2

Source: Xinhua | 2019-05-05

China's growth recovery is expected to continue in the second quarter (Q2) of this year as the current pro-growth measures are different from the past, according to global investment bank UBS.
The rebound in credit impulse will likely be smaller, and property is not a big part of the stimulus, UBS said in a research note.
Meanwhile, there is more focus on tax cuts and private sector lending support this time and less room for supply cuts to push up imports and prices, the note added.
Combined infrastructure and property investment should rebound from 4.8 percent in 2018 to 7.2 percent in 2019, and as property stabilizes and some value-added tax cuts get passed through, consumer confidence and purchase of durables and consumer luxury goods should improve.
Despite the continued weakness, UBS expected auto sales to stabilize this year as some headwinds such as the expiration of auto tax cuts blow over.
The Chinese economy beat market expectations by growing 6.4 percent in Q1. The government has set its 2019 GDP growth target at 6 to 6.5 percent.