GDP Growth - Pang Ru Yee

World's Second Largest GDP Growth Remains Clouded....

China is the second largest country in term of Gross Domestic Product (GDP) in the world. After decades of skyrocketing growth in China's GDP, many are expecting China will go through a tough growth this year. 

GDP = C + I + G + (X - M )

According to a forecast surveyed recently from a group of analyst, China's GDP has already slowed down in the 2Q of 2013.

With U.S. recovery remains slow and the Euro zone is merely in recession, this hamper China's manufacturing and exports sectors. 

The exports growth rates are down from past double-digit growth rates, after government cracked down on institutions overstating their balance sheets to claim tax rebates.

There are some turmoil in the interbank lending market due to the unexpectedly declined to further ease liquidity  to the market by China's central bank.

The credit tightening in China which took parts since May causing cash crunch in China's lending market. The money supply (M2) in China rose more slowly in June compared to May.

While the consumer price index (CPI) looks tame in June, a higher food prices poses a greater threat to China's inflation. Meantime, prices in the agricultural sector was up in June.

Post by Pang Ru Yee