The Day at a Glance | July 15 2021

The Top

*China grew slightly less than expected in the 2Q21; it`s still set to record a 6% increase in 2021.

*Members of the Central Bank of England showed concern for inflation; stimuli could be withdrawn soon.

*Economic indicators: Industrial production figures in the United States will be made public (0.6% e. m/m).

Economic environment

Growth in China becomes more moderate. Growth Domestic Product figures in China for the 2Q21 became more moderate regarding the world`s second largest economy`s growth by recording a 7.9% annual rate of expansion (1.3% q/q). The figure set slightly below the estimated 8%, even though there was surprising data seen in industrial production and retail sales figures in the last month of the quarter. The data shows deceleration in the economy with respect to the 18.3% annual rate recorded in the 1Q21; the slowdown can be explained, in large part, by the thinning down effect of a low base comparison caused by the pandemic, even though growth was more balanced after an extraordinary expansion was seen in the industrial sector in 2020. Industrial production (8.3% annual) and retail sales (12.1%) exceeded estimates in June, and at the moment, have eased concerns of a greater slowdown. Retail sales were backed by improvements among restaurants and similar services. Fixed investment increased 12.6% and unemployment remained unchanged at 5% during June. The Chinese economy`s growth is expected to continue becoming more moderate in the second half of 2021 as global demand once again focuses on services and Chinese exports will log a decrease in demand. Increased costs of raw materials and disruptions in productive chains are also expected to affect the industrial sector – along with COVID19 outbreaks that could limit consumption, which is why authorities have prepared new stimuli if necessary.