ING on China: "Big beat in December activity data ... revising our GDP forecast higher"

ING response to China's data releases today, in brief:

• China's retail sales data was much stronger than expected in December even though this strong growth came mainly from food and medicines. The message is clear. If retail sales in 4Q22 can be this good, then retail sales in 1Q23 should be even better.

• With a stronger end to 2022 than we had expected, plus indications of stronger retail expenditure ahead, the outlook for GDP growth in 2023 has improved compared to our prior outlook. That is not to ignore the fact that China still faces considerable headwinds, including external demand, with recessions likely in the US and Europe this year.
• Nevertheless, taking all these factors into account, we are revising our GDP growth (%YoY) forecasts modestly upward for 2023.

The data and some other responses:

• China Q4 GDP 0.0% q/q (expected -0.8)
• China December economic activity data beats across all 3 indicators

• China says its 2022 GDP growth was 3% - analyst response is: Nope, much lower
• US traders will return to headlines: China's economy Q4 growth one of the worst on record