Recently released Chinese economic data for July 2012 is weaker than expected, particularly in export-import growth, industrial production and retail sales. Although, the Chinese inflation rate was higher than expected, it continued downward, falling to the lowest level in 30 months.
KResearch views that the unexpectedly slow Chinese economy will likely lead to fluctuation in financial market (especially toward risk assets and global oil prices) in line with anticipated monetary easing by the People's Bank of China (PBOC) that may appear in upcoming weeks.
As China is now our top export market, KResearch expects that disappointing Chinese economic figures for July, particularly imports that slowed for the second consecutive month – and were lower than estimated by analysts – may signal that Thai export figures for July (to be released by the Ministry of Commerce soon) may report a contraction for the second consecutive month after the 4.2-percent contraction seen in June. If the Thai export recovery in July is delayed, it is possible that our export performance in 2012 may be lower than KResearch forecast of 7.0-13.0 percent growth.
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