China’s economy witnessed a slow growth in the second quarter amid a fall in demand, highlighting the need for further stimulus to boost growth.
The National Statistics Bureau said the world’s number two economy grew 6.3% on-year in April-June, faster than the previous three months but much weaker than the 7.1% predicted in an AFP survey of analysts.
“The data suggests that China’s post-COVID boom is clearly over,” said Carol Kong, an economist at the Commonwealth Bank of Australia in Sydney.
“The higher-frequency indicators are up from May’s numbers, but still paint a picture of a bleak and faltering recovery and at the same time youth unemployment is hitting record highs.”
According to some economists, the latest data suggest that Beijing missing its modest 5% growth target for 2023.
More timely June data, which was released alongside the GDP numbers, showed China’s retail sales grew 3.1%, slowing sharply from a 12.7% jump in May. Analysts had expected growth of 3.2%.
Industrial output growth unexpectedly quickened to 4.4% last month from 3.5% seen in May, but demand remains lukewarm.
Private fixed-asset investment shrank 0.2% in the first six months, a sharp contrast to the 8.1% growth in investment by state entities, suggesting weak private business confidence.
Recent data showed a rapidly faltering post-COVID recovery as exports declined the most in three years due to cooling demand at home and abroad while a prolonged downturn in the key property market has sapped confidence.
The weak overall momentum and global recession risks have raised expectations policymakers will need to do more to shore up the world’s second-biggest economy.
Authorities are likely to roll out more stimulus steps including fiscal spending to fund big-ticket infrastructure projects, more support for consumers and private firms, and some property policy easing, policy insiders and economists said.
— With additional input from Reuters
