China’s economy grew at an annual pace of 6.3% in the April-June quarter, well below analyst expectations given the slow pace of growth last year.
The world’s second-largest economy is expected to slow further in the coming months as its post-pandemic recovery falters, given weak consumer demand in China and sluggish demand for Chinese exports elsewhere.
China’s gross domestic product (GDP) growth of 6.3% from April to June outpaced the previous quarter’s 4.5% growth, according to government data released on Monday.
On a quarterly basis, the economy grew by 0.8% compared to the first three months of the year.
The still-strong growth was largely due to economic growth of just 0.4% in the same period last year, amid strict lockdowns in Shanghai and other cities during the COVID-19 pandemic. It depends.
Analysts had expected growth of more than 7% for the quarter through June.
China’s GDP beat expectations in the first quarter, growing 4.5% as consumers flocked to shopping malls and restaurants after nearly three years of “zero-corona” restrictions were lifted at the end of 2022.
Earlier this year, the Chinese government set an economic growth target of “around 5%” for this year, a conservative target that will only be met if GDP growth picks up in the coming months.
Exports fell 12.4% in June from a year earlier as global demand weakened after U.S. and European central banks raised interest rates to curb inflation, data released earlier showed.
Retail sales, a measure of consumer demand, rose 3.1% in June compared to the same period in 2022.
Industrial output, which measures activity in the manufacturing, mining and utilities sectors, beat analysts’ expectations, rising 4.4% in June from a year earlier.
Chinese policy makers don’t have to fight inflation, but they may eventually have to fight the opposite: deflation, or falling prices due to weak demand. In recent months, authorities have tried to facilitate lending and spending, with mixed success.
Fixed asset investment, which is spending on infrastructure and other projects to fuel growth, still rose by 3.8% in the first half of 2023 compared to the same period in 2022.