China Gives World First View of Post-Lockdown Rebound: Eco Week

(Bloomberg) — The country first hit by the coronavirus pandemic will this week have a clearer picture of its progress on nursing the economy back to health.

China reports second-quarter gross domestic product on Thursday, along with monthly readings for industrial output and retail sales. An easing of lockdown measures plus a modest amount of policy stimulus should be enough to post a positive growth rate, after the historic 6.8% collapse in the first quarter.

Economists forecast a 2.5% expansion in the three months to June, with the recovery momentum largely unscathed even after a fresh outbreak in Beijing prompted the return of some controls on movement.

That flare-up served as a reminder that even amid a strengthening domestic economy, consumption remains weak and vulnerable to sudden downturns. As the world’s manufacturing hub, China is also still suffering from the collapse in global demand amid the pandemic.

What Bloomberg’s Economists Say:

“A clear upturn in China’s industrial production suggests the economy expanded in 2Q after cratering in 1Q due to the coronavirus impact. Even so, weakness in private and external demand means the pace of growth is likely to be well below historical levels. Activity data for June are expected to show the recovery has withstood a resurgence in Covid-19 cases in Beijing.”

–Chang Shu and David Qu, Bloomberg Economics. For full preview, click here

Elsewhere, it’s a busy week for central banks, with policy makers in Japan, South Korea, Indonesia, Canada, Chile, Poland and the euro area among those setting policy.

Click here for what happened last week and below is our wrap of what else is coming up in the world economy.

U.S. and Canada

In the U.S., the economic calendar gets busier with retail sales and jobless claim data taking center stage. Retail sales continued to bounce back in June, with forecasts calling for a smaller-yet-still-robust advance — after a record surge a month earlier as state economies reopened from lockdowns.

Other reports are projected to show firmer new-home construction and industrial output in June, while consumer sentiment improved slightly in early July. At the same time, a recent rise in coronavirus cases calls into question the strength of the economic rebound in coming months.

It’s also the last week that Federal Reserve officials will make the rounds before a blackout on their public speeches begins Friday at midnight ahead of the July 28-29 meeting. Regional Fed presidents including John Williams, Robert Kaplan, Charles Evans, Pat Harker and Jim Bullard are set to speak. The Fed’s Beige Book is released on Wednesday.

In Canada, the central bank will announce its next steps in policy on Wednesday as it transitions from emergency financing toward keeping the expansion alive.

For more, read Bloomberg Economics’ full Week Ahead for the U.S.

Europe, Middle East and Africa