The following information has become available since the issuance of the staff report. It does not alter the thrust of the staff appraisal.
1. Growth. Real GDP growth was 7.6 percent (year-on-year) in the second quarter. This was broadly in line with market expectations and slightly stronger than the staff projection. The seasonally adjusted data suggest a slight pick-up in momentum. Staff continues to forecast growth to be 8 percent this year and 8½ percent next year.
Real GDP Growth
Sources: CEIC; WEO; Haver Analytics; and IMF staff calculations.
2. Inflation. Inflation fell to 2.2 percent in June, a drop of 0.8 percentage points from May. The decline, which was larger than expected, was due in large part to a reduction in pork prices. Nonfood inflation remained unchanged from May at 1.4 percent.
3. Trade. The trade surplus widened in June as growth slowed more in imports than exports. From May to June, import growth fell from 12 to 6 percent, and export growth from 15 to 11 percent. Declining global commodity prices are contributing to slowing import growth.