- China’s Q2 GDP growth surprised on the upside with 3.2% yoy.
- However, a closer look reveals that the demand side is still the deterring factor in the economy. We expect these issues to ebb only slowly. Nevertheless, we revise our growth outlook up to 1.8% in 2020 from 1.3% before.
- We expect further policy support to come mainly from the PBoC and expect another 50 bps RRR cut and a reduction Loan Prime Rate by 20 bps via MLF cuts.