The Day at a Glance | May 17 2021

The Top

*Industrial production and investment boosted growth in China during April; consumption was lagging.

*Trade representatives in Mexico, the United States and Canada will have a meeting today and review the progress made regarding the USMCA.

*Republicans prepare a new infrastructure investment plan to counteroffer Biden`s.

Economic environment

The most recent growth figures in China showed a slower than expected recovery in domestic consumption. The recovery in the world`s second largest economy continued to depend on the exporting sector and the local real estate market during April as industrial production increased 9.8% and fixed investment grew 19.9% – both at annual rates. However, retail sales data disappointed as they logged a 17.7% rate of growth (vs 25% e.). The recovery in consumption has become more moderate and it`s believed that the economy could have reached its highest level of acceleration during the 1Q21, which is why a moderation in the rate of growth can be expected in the following months. Consumption among households in China has not returned to pre-pandemic levels given the limited growth in income, even though the unemployment rate decreased to 5.1% in April from 5.3% in March. Domestic consumption was expected to become the main driver for growth in 2021, replacing industrial growth and investment, however, this has not happened yet. The National Statistical Office assured that the economy has stabilized, but risks are still faced due to the uneven recovery at a global level and the fragility in growth seen at a local level. The country`s leaders have characterized the recovery as unstable and unbalanced, which is why they have called for efforts to boost a more firm recovery in domestic demand.