The Day at a Glance | April 16 2021

The Top

*China grew at an 18.3% annual rate in the 1Q21 (vs 18.5% e.); quarterly growth set below estimates (0.6% vs 1.5% e.).

*Recovery in Latin America is at risk due to a new outbreak of the COVID-19 virus; GDP per capita will not return to pre-pandemic levels until 2024: IMF.

*New COVID-19 cases at a global level are once again at their highest level since the start of the pandemic; deaths surpassed 3 million.

*Economic indicators: A 1.3% annual rate of inflation was confirmed in the Eurozone during March.

Economic environment

The Chinese economy recorded an 18.3% annual rate of growth in the 1Q21. The world`s second largest economy showed a firm economic recovery a year after the pandemic`s impacts. Growth was mostly boosted by an improvement in the domestic market and global demand, in addition to support from the government. This is the highest recorded rate of growth since the quarterly figure has been made public in China (1992) and places the economy on track towards the 6% objective that Chinese authorities set for 2021 (6.9% e.). Retail sales recorded a larger than expected expansion in the last 12 months (34.2%) while investment increased 25.6% and industrial production moderated its performance (14.1% annual). Data points towards a more balanced recovery in the economy since it`s not only being boosted by exports and industrial production, but also by the domestic market. China has redoubled its efforts regarding vaccine programs in the last month, which could help maintain the improvement seen in the demand for services within the economy. Quarter to quarter growth reached 0.6% (vs 1.5% e.) and is expected to moderate its performance throughout the rest of the year as demand for extraordinary exports will become diluted and monetary stimuli are reduced. The Central Bank of China has requested the banking sector to decrease the supply of credit in the following months in order to avoid risks related to debt and possible bubbles among assets.