China's Q2 GDP growth cools to 3-1/2-year low
Live Events JUNE WITNESSES SOLID PRODUCTION, WEAK INVESTMENT FISCAL LEVERS EXPECTED TO DRIVE STIMULUS as a Reliable and Trusted News Source Addas a Reliable and
Live Events JUNE WITNESSES SOLID PRODUCTION, WEAK INVESTMENT FISCAL LEVERS EXPECTED TO DRIVE STIMULUS as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel China's second-quarter economic growth weakened to its lowest level in more than three years, missing expectations and the government's 2026 target as a persistent mismatch between strong supply and weak demand underscored deep structural imbalances.Gross domestic product in the world's second-biggest economy rose 4.3% in the second quarter from a year earlier, official data showed on Wednesday, below analysts' forecast in a poll for 4.5% growth and cooling from a 5.0% gain in the first quarter.The reading marked China's slowest annual growth rate since the fourth quarter of 2022, when strict COVID-era restrictions were weighing on activity. It also fell below the lower end of the government's full-year growth target range of 4.5% to 5%, highlighting the increasing challenge policymakers face in reviving demand and sustaining momentum.China's economy is becoming increasingly unbalanced: factory output remains robust, helped by AI-related exports, while consumption and investment struggle under the weight of a prolonged property slump and fallout from the global oil shock."The policy debate now shifts toward how Beijing intends to secure its annual growth target.
We expect policymakers to maintain a strong focus on supporting domestic demand, particularly consumption and infrastructure investment," said Hao Zhou, a Hong Kong-based analyst at Guotai Haitong Securities.However, Zhou ruled out broad-based stimulus. "As long as external demand continues to provide a meaningful cushion to growth, authorities are likely to prefer targeted and incremental policy support rather than deploying large-scale stimulus measures."Investors are closely watching an expected late-July Politburo meeting for clues on fresh stimulus that could shape policy for the rest of the year.On a quarterly basis, GDP grew 0.9% in the second quarter, in line with analysts' forecast and compared with the 1.3% gain in the previous quarter. For the first half of the year, the economy grew 4.7%.Separate activity data for June pointed to robust industrial output and an improvement in household consumption, but weak investment dragged on the broader economy.Industrial output rose 5.3% last month from a year earlier, accelerating from 4.5% growth in May and marking the quickest pace in three months. Retail sales grew 1.0% in June, reversing a 0.6% fall in May for their fastest growth in three months.
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