Core view
GDP grew by 4.8% in the first quarter, lower than our expectation. As there is still great uncertainty about the epidemic, the economy is facing greater downward pressure in the second quarter of this year. Referring to the experience of the epidemic in Wuhan for 20 years, we believe that after the meeting of the Political Bureau in April, we may put the protection of employment in a more prominent position, emphasizing the priority of employment, the main body of the market and the employment of residents. In the future, fiscal and monetary measures will be taken simultaneously to ensure residents' employment. In terms of finance, a new round of anti epidemic special treasury bonds will be issued to help enterprises rescue; Expand the scale of phased tax rebate and fee reduction; We will strengthen the return of unemployment insurance and provide wage subsidies. In terms of currency, reduce MLF interest rate, guide LPR downward, and reduce comprehensive financing costs of enterprises; Increase the amount of special refinancing, help restore the supply chain and ensure the supply of materials, and alleviate the pressure of enterprise cash flow; Increase support for small, medium-sized and micro enterprises, and increase the amount of refinancing to support inclusive small and micro loans.
Multiple pressure resonance, sustained pressure on Employment
In March, the unemployment rate in the national urban survey was 5.8%, up 0.3 percentage points from February, breaking the upper limit of the target threshold of 5.5% and 5.3% in the same period last year. Employment continued to be under pressure. The multi-point outbreak of the epidemic in China, the slow resumption of work after the festival in northern China, the decline of enterprise profitability and other factors resonated, and the unemployment rate rose. Looking ahead, as the epidemic has not yet eased, the employment pressure may further increase in April.
In Q1, the year-on-year growth rate of GDP was 4.8%, and the momentum of economic growth was weak
The actual GDP growth rate in the first quarter of 2022 was 4.8%, lower than our previous forecast (5.4%), but basically close to the consensus expectation of the market (wind's consensus expectation was 4.8%). We believe that the economic fundamentals are disturbed by the exogenous impact of the epidemic and the risk of local rupture of the supply chain. On the whole, the first quarter of 2022 increased by 1.3% month on month compared with the fourth quarter of 2021, and the upward repair momentum of the economy slowed down. Considering that there is still some uncertainty in the interpretation of the recent epidemic, we maintain the "Nike" trend of GDP growth throughout the year.
The epidemic disturbance is strong, and industrial production is under pressure
In March, the added value of industries above designated size increased by 5.0% year-on-year, which fell significantly compared with the previous value, slightly lower than our expectation. The main reason is that the current round of epidemic is more complex and disturbs the local steady growth process, which puts pressure on industrial production, but still maintains a certain toughness. Under the background of the aggravation of the epidemic and the dynamic clearing policy in China, the impact of offline consumption is severe. The year-on-year growth rate of the production index of the service industry in March was - 0.9%. The contact aggregation industries such as railway transportation, air transportation, accommodation and catering were greatly affected by the epidemic. We believe that in April, the epidemic situation continued and the sealing and control efforts of all localities were strengthened. If the national supply chain could not be repaired in time and the progress of industrial enterprises returning to work and production was limited, the industrial production would be further under pressure, the impact of service industry production would be severe, and the pressure of production end decline would be great.
The epidemic situation is severe, and consumption has been greatly corrected
In March, the total retail sales of social consumer goods was - 3.5% year-on-year, with a significant correction compared with the previous value of 6.7%. It was mainly due to the severe epidemic situation and the high base of last year, and the repair of social zero was blocked again. In terms of structure, the structural differentiation is significant, the economic boom of necessities and houses continues, and the catering callback is obvious. Looking ahead, the epidemic situation in April has not been significantly alleviated, and its impact rate probably continued to May. In April, the social zero probability decreased further, and the consumption recovery still needs patience.
Investment demand grew steadily, and manufacturing investment was driven by industrial base reengineering and strong chain supplement
From January to March, the national fixed asset investment (excluding farmers) increased by 9.3% year-on-year, slightly higher than the consensus market expectation of 8.6%. Among them, the investment in real estate development increased by 0.7% year-on-year, the investment in infrastructure (excluding power, heat, gas and water production and supply) increased by 8.5% year-on-year, and the investment in manufacturing increased by 15.6% year-on-year. From the year-on-year growth rate of the month, the year-on-year growth rates of real estate, infrastructure and manufacturing were - 2.4%, 8.8% and 11.9% respectively. Looking forward to the whole year, we believe that the growth rate of infrastructure investment shows a trend of high before and low after. The performance of manufacturing investment is still strong supported by many factors such as industrial foundation reconstruction and strong chain supplement. The real estate investment is expected to achieve positive growth.
Risk warning: the epidemic situation worsened beyond expectation; The implementation of the policy is less than expected; Geopolitical conflicts exceeded expectations.
