Importantly, May PMIs aligned with trends in April, where they signaled a deterioration in the macroeconomic environment.
IMF growth forecast and takeaways from May PMI
Wednesday May 29, the IMF amended its growth forecast for China for 2024, aligned with Beijing’s projection of 5%. The IMF attributed the upward revision from the previous forecast of 4.6% to a better-than-expected first quarter of 2024 and Beijing’s policy measures.
Nonetheless, the IMF expects growth to slow to 4.5% in 2025. NBS PMI figures for April and May suggest a slowdown in economic momentum, consistent with the IMF’s 2025 outlook.
However, on Monday June 3, China’s Caixin manufacturing PMI will likely have a greater impact on market risk sentiment. Economists expect the Caixin manufacturing PMI to rise from 51.4 to 51.5 in May.
Hang Seng Reaction to NBS Manufacturing PMI
Ahead of the PMI figures, the Hang Seng Index was up 0.98% at 18,410.
However, the Hang Seng Index shrugged off weaker-than-expected figures, climbing to 18,537.
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