China’s economy saw slower growth in the second quarter amid a slump in demand, highlighting the need for more stimulus to spur growth.
The National Bureau of Statistics said the world’s number two economy grew 6.3% year-on-year in April-June, faster than the previous three months, but much weaker than expected. AFP Survey of analysts.
“The data shows that China’s post-corona rally is clearly over,” said Carol Kong, an economist at the Commonwealth Bank of Australia in Sydney.
“High-frequency indicators are above May numbers but still paint a picture of a bleak and faltering recovery with youth unemployment reaching record highs.”
According to some economists, the latest data suggests Beijing has missed its modest 5% growth target for 2023.
Figures for June, which were released along with GDP data on time, showed that China’s retail sales grew 3.1%, slowing from a 12.7% rise in May. Analysts were expecting growth of 3.2%.
Industrial production growth unexpectedly rose to 4.4% last month from 3.5% in May, but demand remains subdued.
Private real estate investment declined by 0.2% in the first six months, in sharp contrast to an 8.1% increase in investment by state entities, indicating weak private business confidence.
Recent data showed that the post-Covid recovery is faltering fast, as exports fell by the most in three years due to subdued demand at home and abroad, while a prolonged slump in key asset markets Confidence has waned.
Weak overall momentum and risks of a global recession have raised expectations that policymakers will need to do more to prop up the world’s second-largest economy.
Policy insiders and economists said the authorities are likely to take more stimulus steps, including increased fiscal spending to finance mega-infrastructure projects, more support for consumers and private companies and some asset policy easing.
– With additional input from Reuters