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China's Q1 GDP Growth Set to Slow to 4.6%, Keeps Pressure for More Stimulus

A pedestrian walks on an overpass past car traffic in Beijing, China January 12, 2024. REUTERS/Florence Lo/File Photo
A pedestrian walks on an overpass past car traffic in Beijing, China January 12, 2024. REUTERS/Florence Lo/File Photo
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China's Q1 GDP Growth Set to Slow to 4.6%, Keeps Pressure for More Stimulus

A pedestrian walks on an overpass past car traffic in Beijing, China January 12, 2024. REUTERS/Florence Lo/File Photo
A pedestrian walks on an overpass past car traffic in Beijing, China January 12, 2024. REUTERS/Florence Lo/File Photo

China's economy likely grew 4.6% in the first quarter from a year earlier - the slowest in a year despite tentative signs of steadying, a Reuters poll showed on Thursday, maintaining pressure on policymakers to unveil more stimulus measures.

Gross domestic product (GDP) in the world's second-biggest economy is also expected to grow at a subdued 4.6% pace in 2024 year-on-year, according to the median forecast of 86 economists polled by Reuters, falling short of the official target of

The first-quarter growth forecast compares to 5.2% in the previous three months and is the lowest since the January-March quarter in 2023, underlining the strains in the economy despite stronger than expected January-February data on factory output and retail sales, as well as exports.

Analysts expected growth to pick up to 5.0% in the second quarter, but policymakers have their work cut out in trying to shore up confidence and demand.

China's economy has struggled to mount a strong and sustainable a post-COVID bounce, burdened by a protracted property downturn, mounting local government debts and weak private-sector spending.

The government has unveiled fiscal and monetary policy measures in a bid to achieve what analysts have described as an ambitious 2024 GDP growth target, noting that last year's growth rate of 5.2% was likely flattered by a comparison with a COVID-hit 2022.

"The economy has yet to recover," Ting Lu, chief China economist at Nomura, said in a note. "The property sector is still on the decline, the risk of another fiscal cliff is on the rise, geopolitical challenges are likely to sustain, and growth might face downward pressure again over the next few months."

Fitch cut its outlook on China's sovereign credit rating to negative on Wednesday, citing risks to public finances as Beijing channels more spending towards infrastructure and high-tech manufacturing, amid a shift away from the property sector.

China's consumer inflation cooled more than expected in March, while producer price deflation persisted, suggesting policymakers may need to launch more stimulus to spur demand.

On a quarterly basis, the economy is forecast to expand 1.4% in the first quarter, quickening from 1.0% in October-December, the poll showed.

The government is due to release first quarter GDP data, along with March activity data, at 0200 GMT on April 16.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.