China Center Data Flash: Nominal GDP growth trap spurs another RRR cut

Data Flash is a brief interpretive summary of China’s official monthly economic data release.

Prime Minister Li may have said it best when he remarked that "economic data in the first quarter are not pretty." He went on to say that "traditional economic driving forces…are diminishing, while new forces are not compensating." As well, the 100-basis-point cut to bank reserve requirements that the PBoC enacted is evidence of an enhanced policy response to the economic weakness, which has persisted into Q2.

Such sentiment from one of China's top leaders along with the action from the central bank appear to evoke much more than simply a 0.3 percentage point slide in real GDP in Q1. And indeed, a host of indicators from last week's data release suggest a much more grim growth environment.