Industrial profits grew by +10.3% in 2018. State-holding enterprise’s profits rose by +12.6% while private enterprises recorded growth of +11.9%. Revenues were a key growth driver, rising by around +8.5%. However, the latest monthly data is less encouraging than the annual figures, with industrial profits decreasing by -1.9% y/y in December (after -1.8% in November). Going forward, the short term outlook is also not promising. First, both external and domestic demand will grow at a slower pace in Q1 as global uncertainties weigh on private demand. Second, the price momentum that has supported revenue growth last year is fading (+0.9% y/y in December, down from +2.7% in November). On a positive note, both monetary and fiscal policies are becoming more supportive. This should help keep economic growth at a decent level of +6.3% this year (after +6.6% in 2018).
