21 April 2023
Enodo QuickTake
Enodo April Nowcast Suggests Solid Q2 Growth
- Real GDP growth is likely to slow in Q2 but remain solid as Beijing's stimulus filters through
- Enodo's nowcast points to a quarterly increase of 1.3% in Q2 compared with 2.2% in Q1 and an average growth of 0.8% in 2022
- The negative surprise on the latest GDP release -- our nowcast saw growth at 3.9% in Q1 -- was the main reason pulling our nowcast for Q2 lower in April compared with the 1.9% expected in March
- Enodo's nowcast has been thrown off by the negative/positive shocks of the Covid and post-lockdown changes, so Q2 growth could be somewhat stronger than our nowcast suggests
- Consumer spending and net exports contributed positively to growth in Q1 while investment, especially in the construction sector, disappointed
- The immediate positive post-lockdown consumption effect in Q1 is likely to have petered out by this quarter, but state sector investment should provide a boost
- Base effects will underpin a strong annual expansion, with our nowcast suggesting 8.2% growth in Q2 compared with 4.5% in Q1
- Commentators stubbornly continue to take their cue from China's authorities, focusing their reporting on annual growth rates rather than sequential growth, which is much more relevant for assessing current momentum
- As we discussed earlier in the week, Chinese equities should continue to perform well in coming months, but all bets will be off by the autumn
Enodo Nowcast: April
| Nowcast of official GDP | |||
| Qoq % | Yoy % | ||
| Q2 2023 | 1.26 (1.87) | 8.17 (8.82) | |
| Q3 2023 | 1.26 (1.45) | 5.42 (6.26) | |
| Nowcast of Enodo GDP | |||
| Q2 2023 | 1.49 (2.17) | 6.68 (7.39) | |
| Q3 2023 | 1.25 (1.26) | 6.06 (6.78) | |
| Forecasts from a month earlier in brackets | |||
Source: Enodo Economics
This vintage of our nowcast includes monthly data through April and quarterly data through Q1 2023.
Official real GDP growth nowcast
Qoq, %, nowcast for Q2 2023 and Q3 2023 last three vintages
Source: Enodo Economics, CEIC
Official real GDP growth nowcast
Yoy, %, nowcast for Q2 2023 and Q3 2023 last three vintages
Source: Enodo Economics, CEIC
Click HERE for more details about the April 2023 Enodo nowcast.
Our model “nowcasts” China’s official real GDP growth and Enodo’s own real GDP growth estimate, incorporating over 50 macroeconomic data series as they become available. We use the model-based approach to analyse the news flow in real-time, so we can produce monthly forecasts for the current and the next quarter.
Click here for our methodology.