According to the average forecast of 82 economists polled by Reuters, in the 2nd quarter, China's GDP growth slowed to 5.1% per annum (the weakest growth since the 3rd quarter of 2023) from 5.3% per annum in the 1st quarter, affected by sluggish consumer demand. Despite the fact that such growth will make it possible to reach China's target for 2024 (about 5%), the protracted real estate crisis, weak domestic demand, the depreciation of the yuan and trade disputes with the West are serious obstacles to the economy. Overall, economists expect China's economy to expand by 5% per annum in 2024, but then growth will slow to 4.5% per annum in 2025.
Meanwhile, a further slowdown in GDP growth in the second half of 2024 may prompt policymakers to step up economic support. Consensus estimates suggest that GDP will grow by 4.8% per annum in the 3rd quarter and by 4.7% per annum in the 4th quarter. Investors are watching next week's key party leaders gathering for hints on the policies to address these challenges.
Recent data showed that consumer inflation in China fell short of expectations in June, indicating continued deflationary risks. Analysts expect the CPI to rise by 0.6% in 2024 - well below the government's target of about 3% - and then inflation to accelerate to 1.5% in 2025.
The government will publish GDP data for the second quarter, as well as June statistics on retail sales, industrial production and fixed asset investment on Monday, July 15.