GDP in the third quarter is about to be released, and 12 institutions predict an average of more than 4.5%, and the RRR and interest rate cuts may still be cut within the year

Source: Times Weekly Author: Wang Chenting

After the macro data in August exceeded expectations, will the overall data for the third quarter bring surprises? The answer will be revealed on October 18, and the National Bureau of Statistics will release the macro data for the third quarter at 10 a.m. that day.

The Times reporter comprehensively counted the forecasts of 12 institutions and think tanks, and found that the forecasts of these institutions for the GDP growth rate in the third quarter of this year were between 4.0% and 4.9%, with an average of 4.53%.

"Overall, due to the combined impact of continued negative growth in real estate investment, weak recovery in consumption and sluggish export performance, economic growth in the third quarter will record a flat performance in the first quarter and weaker than the second quarter, and the year-on-year growth in the quarter is expected to be around 4.5%, and the growth rate will pick up slightly in the fourth quarter, and GDP is expected to achieve a growth rate of about 5% in 2023." Wang Jun, chief economist of Huatai Asset Management Co., Ltd., said in an interview with the Times reporter.

Since the Politburo meeting on July 24 this year, relevant favorable policies have been intensively introduced, and there are still favorable policies that continue to land until September. In order to consolidate the economic growth situation and complete the annual growth target of 5%, many institutions expect that the follow-up policy easing stance will continue, and the RRR cut and interest rate cut in the fourth quarter are still possible.

The average forecast of 12 institutions is 4.53%

According to incomplete statistics from the Times reporter, the forecasts of 12 institutions for the GDP growth rate in the third quarter are all between 4% and 4.9%, of which 8 are above 4.5% (inclusive), and 4 are below 4.5%, with an average value of 4.53%.

The forecast value of 12 institutions and think tanks (Source: Times reporter Wang Chenting/System)

Among them, Deppon Securities expects GDP growth of about 4.7% in the third quarter and more than 5% for the whole year.

Lu Zhe, chief economist of Deppon Securities, told the Times reporter in an interview that from the perspective of production, the industrial added value in the third quarter is expected to be about 4.3%, the service industry production index is expected to be more than 6%, and the industrial and service industries account for more than 90% of the GDP of the production method. Therefore, on the whole, the quarterly GDP growth rate is about 4.7%, and the annual economic growth rate can reach about 5.1%, completing the economic target of about 5% set by the National People's Congress and the National People's Congress at the beginning of the year.

The Bank of China Research Institute and the Peking University HSBC Think Tank Economic Group have both given relatively optimistic forecasts, expecting GDP growth of 4.9% in the third quarter.

The economic group of Peking University HSBC think tank believes that the main economic indicators rebounded after a low opening, the internal development of the economy was clearly differentiated, and the counter-cyclical adjustment policy in the third quarter was significantly increased. At present, the "policy bottom" is clear, and the economy is still in the stage of building a bottom. GDP growth in the third quarter is expected to be 4.9%. Against the background of the Fed's high target interest rate, PMI in most countries in the world in the contraction zone, and global foreign trade under pressure, China's economic growth rate is not low and should not be overly pessimistic.

China Merchants Bank Research Institute's forecast is the lowest among 12 institutions. CMB Research Institute believes that the economy will continue to recover moderately in September, and the economic momentum in the third quarter will improve compared with the second quarter. As the GDP base in the second and third quarters of last year turned from low to high, the year-on-year GDP growth rate in the third quarter of this year may decline from the second quarter, located around 4%.

CICC gave a 4.1% judgment.

The company's research report pointed out that it is expected that the year-on-year growth rate of exports and investment in September may improve marginally under the support of multiple factors such as external demand, prices, and corporate fundamentals, and there will be structural adjustment in consumption, and the overall growth rate may be roughly the same as in the previous month. The improvement of demand margin has led to a recovery in industrial production, but the growth rate may be affected by the high base and decline.

On the whole, CICC expects that the year-on-year GDP growth rate in the third quarter may be 4.1%, and the growth rate will decrease compared with the second quarter under the background of the rising base, corresponding to the four-year compound growth rate basically unchanged in the second quarter.

Positive signals increase but still "weak recovery"

It is worth noting that a number of economists mentioned the positive trend of the economy since August in an interview with the Times reporter.

Wen Bin, chief economist of Minsheng Bank, said that the economy "opened low and went high" in the third quarter, and due to adverse factors such as extreme weather in July, a number of macro data fell short of expectations. In response to the pressure of slowing economic growth, a package of macro counter-cyclical policies continued to exert force, including RRR and interest rate cuts, support for the development of the private economy, real estate policy packages, and active capital markets. At present, these policies are continuing to promote economic stabilization and recovery, and various macro data in August stabilized marginally.

"From the high-frequency indicators in September, the positive factors of the current economic recovery are increasing, and it is expected that the economic growth rate will remain stable throughout the quarter, and the influencing factors of the weak start in July are relatively limited." Wen Bin predicted that mainland GDP in the third quarter will grow by 4.8% year-on-year, and in the first three quarters it will increase by 5.2% year-on-year.

Source: Figureworm Creative

Lu Zhe also told the Times reporter that from the structural point of view, the bright spot of the economy in the third quarter is the introduction of the stable growth policy after the Politburo meeting, which has driven many economic indicators to bottom out month-on-month, such as PPI, industrial production and demand, real estate sales, etc., which means that the economic momentum in the third quarter has rebounded significantly compared with the second quarter.

Specific to the supply side, the steady growth policy continues to provide support.

Soochow Securities said in the research report that there has been good news from time to time in the industrial end recently-the manufacturing PMI is rising, and the profits of industrial enterprises have also successfully bottomed out. However, the research report also mentioned that the current repair of the industrial end is not stable. More than 58% of companies reflected insufficient demand in September, and the sharp decline in the PMI import index in September also confirmed that there is still some distance from a complete recovery of demand.

On the demand side, consumption growth is expected to pick up. Considering that various localities continued to introduce policies to promote consumption in September, superimposed on the Mid-Autumn Festival and National Day in parallel, the Hangzhou Asian Games ran through the holiday, residents' willingness to travel was high, and the consumer market continued to recover.

Wang Tao, head of Asian economic research at UBS, believes that benefiting from the low base, the year-on-year growth rate of retail sales of consumer goods in September may further rise from 4.6% to 5.8%.

However, investment and exports may remain low.

"On the whole, the economic performance in the first three quarters is still a weak recovery in the context of the low base in the same period last year, and the 'troika' that has traditionally driven economic growth has the problem of insufficient momentum. Among them, there are not only the old problems of insufficient demand, but also new problems such as insufficient confidence of some market players. Wang Jun said.

He also pointed out that with the increase of China's economic volatility and uncertainty, the performance of the three major asset markets such as the stock market, foreign exchange market and housing market is weak, and the performance of the asset market highlights the complex situation and many difficulties and challenges faced by China's economy from another aspect.

The accommodative stance continues, and 5% for the whole year is not difficult

Positive signals are increasing, but overall growth momentum remains limited. Heading into the last quarter of the year, how will China's economy continue to recover?

Wang Qing, chief macro analyst of Oriental Jincheng, believes that it is possible to continue to implement policy interest rate cuts in the fourth quarter.

"At present, the market is generally concerned about whether the interest rate will continue to be cut in the future, that is, the MLF operating rate will be lowered. We believe that this mainly depends on the macroeconomic and property market trends before the end of the year, and this possibility cannot be completely ruled out. The next policy will guide the interest rate of newly issued residential housing loans to be lowered relatively quickly, and promote the real estate industry to achieve a soft landing as soon as possible. This is the key point at which the current macroeconomy pulls into the whole body. Wang Qing told the Times reporter.

People's Bank of China (Source: Tuworm Creative)

During the Mid-Autumn Festival National Day Golden Week, with the introduction of policies such as interest rate reductions, down payments, "recognizing houses without loans", and canceling purchase restrictions, the real estate market heated up. However, from a year-on-year perspective, the decline in housing transactions is still obvious. Stabilizing market expectations may require further policy efforts.

CCB International Research Report also believes that macro policies are expected to remain loose, and fiscal support is expected to accelerate to support demand. The PBOC announced a 0.25 percentage point cut in the reserve requirement ratio of financial institutions from September 15 (excluding financial institutions that have implemented a 5% reserve requirement ratio). During the year, the two RRR cuts reduced the deposit reserve ratio of financial institutions by 0.5 percentage points and released medium- and long-term liquidity of more than one trillion yuan. The accommodative stance is expected to continue, and a RRR cut in the fourth quarter is still possible.

According to the economic situation analysis research group of the think tank "Economic Research", judging from the economic performance in the first three quarters of this year, the mainland economy is generally in the process of upward repair, but the slope of repair since the second quarter has slowed down, and economic operation is facing new difficulties and challenges.

"At present, it is not difficult for the mainland to achieve the annual economic growth target of about 5.0%, but it should also be noted that although the mainland economy has been affected by the decline in external demand this year, it has also benefited from the recovery of the service industry after the steady transition of epidemic prevention and control." If the economy eventually achieves growth of about 5.0% this year, then the average growth rate in the past two years is about 4.0%. In order to maintain the steady and healthy development of the mainland's economy, the necessity of policy advance next year has increased. If the counter-cyclical adjustment policy can be implemented in time at the end of this year and early next year, it will be conducive to the realization of the goals of stable growth, stable employment and stable expectations for a relatively long period of time. The research group said.