Data published by the National Bureau of Statistics (NBS) showed that China's GDP grew by 4.7% per annum in the second quarter (the lowest value since the first quarter of 2023) after growing by 5.3% in the first quarter. Economists had expected the economy to expand by 5.1%. The sharp slowdown in growth was due to the prolonged downturn in the real estate market and job insecurity, which put pressure on domestic demand. On a seasonally adjusted quarterly basis, GDP rose 0.7% - also missing forecasts for 1.1% and slowing sharply from 1.6% in the first quarter. The figures come as Beijing seeks to shore up economic confidence at a highly anticipated third plenum, a key leadership meeting that starts Monday. The government aims for economic growth of around 5.0% by 2024. Many analysts consider this goal ambitious and indicate that additional stimulus measures may be needed.
Meanwhile, a representative of the National Bureau of Statistics said that China's economy is facing growing external uncertainty and many internal difficulties and challenges in the second half of the year. "China's GDP growth of 5% in the first half of the year was "achieved with great difficulty" as businesses face relatively high pressures and key industries face many risks," the representative said, adding that China's economic growth in the second quarter was influenced by short-term factors such as extreme weather and floods.
NBS also said that in June, industrial production growth slowed to 5.3% per annum from 5.6% per annum in May, but exceeded economists' forecasts (+5%). Retail sales increased by 2% per annum after an increase of 3.7% per annum in May. Consensus estimates suggested an increase of 3.3% per annum. Fixed asset investment grew by 3.9% per annum, as expected, after an increase of 4% per annum in May. The jobless rate came in at 5.0 percent, matching expectations and unchanged.