OPINION
Market Rating Before FOMC MeetingJan 31
Economic Activity Decelerated in China in October
Data released by the National Bureau of Statistics of China (NBS) earlier today revealed that the growth performance in the world's second-largest economy has slowed.
According to NBS, retail sales, an indicator of the domestic demand course in the country, shrank by 0.5% on an annual basis in October. This pointed out that the domestic demand has contracted for the first time since May. As a matter of fact, the data has grown by 0.58% since the beginning of the year. The rate of increase in the previous year was 0.71%.
On the other hand, production in the industry, which is the leader of the Chinese economy, grew by 5.0% in October, below the market expectations of 5.2% on an annual basis. The data, which increased by 6.3% in the previous month, signaled a slowdown in the industry due to the effect of foreign demand. In this period, fixed capital investments decreased from 5.9% to 5.8%. The unemployment rate remained unchanged at 5.5%.
In the statement made by NBS, it was reported that the Covid-19 closures slowed the economic recovery, but the economy continued its recovery trend in October despite the pressures. Noting that the downward trend continued despite some positive changes in the real estate market, NBS noted that inflation pressures were moderate.
In the global economy, where recession risks are very intense, especially in the USA and the EU, we have been seeing that China is positively differentiated for a while. However, the latest data reveal that economic growth has lost momentum due to the pressure on domestic demand created by the strict 'Zero Covid' policy of the Chinese government and the downward impact of recession risks on foreign demand.
The support of the new data to come in the upcoming period may increase the demand for ounce gold as a safe haven in an environment where the US Federal Reserve (FED) is less likely to be more aggressive in tightening its monetary policy.
According to NBS, retail sales, an indicator of the domestic demand course in the country, shrank by 0.5% on an annual basis in October. This pointed out that the domestic demand has contracted for the first time since May. As a matter of fact, the data has grown by 0.58% since the beginning of the year. The rate of increase in the previous year was 0.71%.
On the other hand, production in the industry, which is the leader of the Chinese economy, grew by 5.0% in October, below the market expectations of 5.2% on an annual basis. The data, which increased by 6.3% in the previous month, signaled a slowdown in the industry due to the effect of foreign demand. In this period, fixed capital investments decreased from 5.9% to 5.8%. The unemployment rate remained unchanged at 5.5%.
In the statement made by NBS, it was reported that the Covid-19 closures slowed the economic recovery, but the economy continued its recovery trend in October despite the pressures. Noting that the downward trend continued despite some positive changes in the real estate market, NBS noted that inflation pressures were moderate.
In the global economy, where recession risks are very intense, especially in the USA and the EU, we have been seeing that China is positively differentiated for a while. However, the latest data reveal that economic growth has lost momentum due to the pressure on domestic demand created by the strict 'Zero Covid' policy of the Chinese government and the downward impact of recession risks on foreign demand.
The support of the new data to come in the upcoming period may increase the demand for ounce gold as a safe haven in an environment where the US Federal Reserve (FED) is less likely to be more aggressive in tightening its monetary policy.
