China's annual growth rate likely to be higher than expected

China's GDP for second quarter indicates improvement in growth momentum. 

Both onbudget and off-budget fiscal support is finally stepping up, therefore, Societe Generale expects a pause in headline monetary policy easing in Q3. Further, the bank says, PBoC will use monetary policy easing measures only for the sake of the stock market.

According to Societe Generale, "China posted Q2 GDP growth at 0.2ppt is better than our forecast, we feel necessary to revise up our forecast from 6.8% yoy to 7.0% yoy for Q3 and from 6.6% yoy to 6.8% yoy in Q4. Consequently, annual growth would be 0.1ppt higher than initially anticipated at 6.9%."