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Analysts on stagflation risk, real estate market slowdown

In China, the risk of stagflation is “very realistic” over the next few quarters, as factory gate prices are rising at a faster pace and the ongoing power crisis is negatively impacting economic growth, analysts said. “.

Stagflation It refers to a situation in which the economy experiences stagnant activity and accelerating inflation at the same time. This phenomenon was first recognized in the 1970s, when the oil crisis caused long-term price increases, but GDP growth fell sharply.

In China Producer price index rose 10.7% in September Compared to a year ago — the fastest pace since October 1996, when data compilation began. in the meantime, Power outages nationwide Prompted some Major Banks Significantly Cut China’s GDP Forecast..

Charlene Chu, a senior analyst at China Macro Financial at Autonomous Research, said the situation has made it difficult for Chinese authorities to significantly stimulate the economy.

Chu is CNBC’s “Street sign asia“The stimulus can increase energy demand and exacerbate ongoing power shortages. At the same time, factories that have to go offline several days a week due to power shortages will continue to hurt economic growth.” She suggested.

“That’s why I think many of the factors that drive growth aren’t going away anytime soon, and we’re in a situation where we won’t be able to get aggressive China stimulus over the next few months,” said Chu. rice field. ..

“This will be a different driving force for the world to adapt,” analysts said, adding that the world is accustomed to China, which is stimulating a break from various economic predicaments.

There is no “confidence crisis” in property

The Chinese economy faces multiple challenges. NS Recorded year-over-year growth of 4.9% in the third quarter It was the latest in a year.

In addition to the power crisis that hit factory production, the slowdown in the real estate sector also slowed growth.

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Trouble in China’s real estate sector I’ve been at the forefront in the last few months Evergrande And other developers had a hard time paying off their debts. It followed a campaign by Beijing to curb excessive borrowing among real estate developers.

Mr Chu said the slowdown in the real estate sector had a “very serious” blow to China’s economic growth. But the country hasn’t reached the stage where confidence in the primary real estate market collapses, analysts said.

“I don’t think the authorities are trying to create a trust crisis across the developer sector,” Chu said.

Analysts on stagflation risk, real estate market slowdown

Source link Analysts on stagflation risk, real estate market slowdown

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