January Macro Data Outlook: Inflation Rebound, Export Acceleration, Credit Expansion Again

All government departments will be released in February 10th and January 2011. Economics Data. The announcement date is only preliminary, and government departments may make adjustments. The statistics bureau does not publish industrial added value or fixed assets this month. Investment Data on retail sales of social consumer goods will be released in 1-2 in March 11th. Our predictions and views on these data are as follows:

Enter Exit Growth will rebound

We expect export growth in January to grow from 17.9% in December to 25%. The implied monthly growth rate rose from around -8% in December to around 100%.

The new export order component index in PMI increased after several months of improvement, but the data series showed a moderate seasonal trend and was basically flat after the quarter adjustment. At the same time, our proprietary Goldman Sachs Global leading indicator (usually ahead of China's export growth for some time) has been improving. South Korea's exports in January also showed strong growth. In addition, the Spring Festival holiday arrangement resulted in a working day in January this year, more than one day in the same period last year.

At the same time, we expect import growth in January to increase from 25.6% in December to 33%. The monthly growth rate increased from around 30% in December to around 140% after the implied quarterly adjustment. Strong import growth is supported by strong domestic demand and rebound in upstream commodity import prices.

The net exports were $9 billion 800 million, down from $13 billion 100 million in December. The decline in net exports is partly due to a smaller trade surplus at the beginning of the year, but there is still a slight decrease in the quarterly data (from 8 billion 300 million US dollars to US $6 billion 700 million).

Inflation will rebound?

In January, the CPI growth rate increased from 4.6% in December to 5.3%, and the monthly growth rate increased from 3.4% in December to 6.7% after the implied quarterly adjustment. The Ministry of Commerce and the Ministry of agriculture both rebounded on food prices and year-on-year inflation. Although the Spring Festival effect may be part of the rise in food prices, other factors such as bad weather may have played a role in the past few weeks. The National Bureau of statistics makes a big adjustment to the classification index and weight of CPI every five years (every year there will be some minor adjustments to make a big adjustment every five years). We expect that this adjustment will have relatively little impact on CPI inflation, and the adjusted CPI may be 0.1-0.2 percentage points lower than the non adjustment. The reason is that although the weight of food ingredients will be lowered (the overall CPI should be lowered), the weight of the housing index will be increased (compared with the overall inflation rate, the price increase is relatively high). According to international statistical standards, the new CPI housing component still excludes housing prices.

In January, the PPI growth rate increased from 5.9% in December to 6% in the year to year, and the monthly growth rate increased by 17.9% after the implied quarterly adjustment, basically unchanged from 18% in December.

Credit and scale growth may both rebound, although growth is expected to slow.

We expect RMB loans to be rebounded in January to 1 trillion and 100 billion yuan, up from 480 billion yuan in December last year. The year-on-year growth rate is expected to drop to 18.5% from 19.7% in December. The monthly growth rate increased by about 22.6% after the quarter adjustment, up from 7.9% in December.

At the same time, we expect that M2 growth in January will decrease from 19.7% in December to 18.5%. The monthly growth rate will increase from 14.5% in December to 17% after the quarter adjustment.

Media reports said that in January, RMB loans had exceeded 1 trillion and 200 billion yuan. However, our research on commercial banks shows that, at the end of the month, some commercial banks under the pressure of the central bank's dynamic differential deposit reserve ratio and other mechanisms have reduced the scale of loans by not extending the loans that are about to expire. In view of the fact that inflation and external demand growth are higher than expected in the past few months, we believe that credit expansion in January is still too fast, as this may further accelerate the already strong domestic demand growth. We believe that the government needs and will take more stringent measures to control lending in the coming months, which will help reduce inflation.