GDP – the right number to watch
China released Q4 and annual GDP data this morning.
As expected, the numbers showed that China’s economy continued to slow in Q4.
2018 official real GDP growth came in at 6.6% – the slowest pace of growth since 2009.Q4 GDP came in at 6.4% – in line with market expectations, down from 6.5% growth in Q3, and the third consecutive quarterly deceleration.2018 Nominal GDP growth came in at 9.7% – down from 10.4% in 2017, but still solid.Nominal Q4 GDP growth, however, came in at 8.1% – down from 9.6% in Q3 and the slowest expansion since Q3 2016.That put the Q4 GDP deflator at just 1.7% – the lowest deflator since Q3 2016.
Get smart: China's GDP numbers are untrustworthy, but they do give clues as to the overall direction in which the country is headed.
Get smarter: The real GDP numbers get all the headlines, but it’s the nominal numbers that give a better indication of the true state of the economy.
The bottom line: The economic slowdown became more pronounced in Q4 2018. And it's going to get worse in Q1 2019