Main points
The impact of the epidemic is significant, and infrastructure alone supports it
Affected by the current epidemic, various indicators of China's economy have fallen significantly. The slowdown of industrial production and the decline of fixed investment, especially the impact on consumption, changed from positive to negative. GDP in the first quarter increased by 4.8% year-on-year, which is still far from the annual growth target of 5.5%. In view of the economic recovery period in the same period last year, the low base and the continuation of the impact of the epidemic in April, various economic indicators will continue to fall in the future. Worthy of attention, the contrarian recovery of infrastructure investment has become the only bright spot of the current data. Since the beginning of this year, all localities have promoted the construction of major projects, cooperated with special bonds and active fiscal expenditure, which has effectively supported the growth of infrastructure investment and will also become an important starting point for steady growth this year.
Increased market volatility
China's current epidemic counterattack will not worsen the economic situation, but prolong the current tight economic operation. Affected by the changes in the economic process, the pattern of the process of first restraining and then rising in the capital market remains unchanged. At present, it is still in the stage of restraining, and the capital market is increasing in short-term or near volatility.
Policy relaxation can be expected
Under the triple pressure of the economy, there is great pressure for the economy to maintain stability this year. The epidemic has undoubtedly further increased the urgency of steady growth. We believe that the driving force of economic growth will also rely more heavily on investment. Consumption will not perform well under the influence of the foam Market overlay. The financial and investment efforts have been fully increased. After the easing of the epidemic, investment and economic prosperity will rebound. In the face of the current downward pressure on the economy, there is still room and necessity for policy relaxation. The RRR reduction has come. In the future, the tools of monetary policy directly reaching the entity may be strengthened. Under the downward trend of money market interest rate caused by the RRR reduction, the interest rate reduction may also be accelerated.
Risk tips
Inflation continues to rise; Repeated changes in the epidemic situation have once again exceeded expectations; Unexpected changes in monetary policy
