Nomura Highlights Falling Housing Prices and Their Impact on China's Market Confidence
Current State of Consumer Confidence in China
Nomura indicates that consumer confidence in China is nearing record lows, primarily due to the ongoing housing prices crisis. As reported, the consumer confidence index fell to 86 in July, just above a historic low created during the pandemic.
Implications for Economic Growth
With a decline in housing prices by nearly 30% from 2021 peaks, alongside moderate wage growth, consumer sentiments have soured. Nomura believes that Beijing must introduce more substantial stimulus measures to tackle the pressing problems surrounding the property sector.
- Consumer confidence impacts spending behavior.
- Existing homes prices have dropped significantly.
- A decline in stock markets, particularly in the Shanghai Composite Index, is evident.
Challenges Facing the Housing Market
Data shows a staggering net capital outflow of US$139 billion as of May 2023, indicating heightened pressure on consumer spending and investment flows.
China's core inflation is rising moderately, but broader economic activities show weak recovery prospects post-COVID. Nomura urges immediate action to restore consumer confidence and stimulate economic activity.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.