Nomura: Golden Week Data Needs To Be Cautiously Interpreted, Expect Beijing To Do More

Nomura note that Golden Week tourism data needs “to be cautiously interpreted, as two holidays were combined this year, even as we adjusted for the length of the Golden Week when performing our analysis.”

• “We also note that the recovery in the number of tourism trips relative to pre-pandemic levels has slowed significantly, pointing to an inevitable fading of post-Covid pent-up demand for travel.”
• “The property sector showed signs of weakening again, despite the raft of easing measures rolled out in September. This was especially the case in low-tier cities, which might be further squeezed by the easing of restrictions in high-tier cities.”
• “In coming months, pent-up demand may fade further, as domestic air ticket prices have already slumped into the holiday and the PMIs for most in-person service sectors dipped into contractionary territory in September.”
• “Also, a seemingly stabilizing economy may slow Beijing’s efforts to roll out policy measures that are necessary for a sustainable recovery, especially measures in the property sector.”
• “Although we raised our 2023 GDP growth forecast to 4.8% from 4.6% to reflect the recent uptick in some activity data, we maintain our 2024 GDP growth forecast of 3.9% and our cautious growth outlook. We expect Beijing will have to do more to stabilize growth in the near future.”