China’s economy expanded at the slowest pace in 27 years in the second quarter, emphasizing the need for measures to stimulate domestic consumption and investment amid escalating trade disputes with the US.
Gross domestic product expanded 6.2 percent year-on-year in the second quarter, slower than the 6.4 percent growth registered a quarter ago, preliminary estimates from the National Bureau of Statistics showed Monday. This was the weakest growth since early 1992.
The economy grew 6.3 percent in the first half of the year, in line with expectations.
However, monthly data for June showed signs of stabilization in the economy. In June, annual growth in industrial production advanced more-than-expected to 6.3 percent from 5 percent in May. This was the fastest growth in three months. Production was forecast to climb moderately by 5.2 percent.
Likewise, retail sales grew at a faster pace of 9.8 percent after rising 8.6 percent a month ago. Economists had forecast an 8.5 percent increase for June.
Year-to-date fixed asset investment increased 5.8 percent compared to 5.6 percent expansion in January to May period.
Further, data showed that property investment logged a double-digit growth of 10.9 percent during January to June period. But this was slower than the 11.2 percent increase seen in January to May.
The unemployment rate in urban areas rose slightly to 5.1 percent in June from 5.0 percent in the previous month, data showed.
The NBS said the economy is under new downward pressure. China will intensify efforts on policy implantation in areas like employment, financial sector, foreign trade and investment so as to boost economic health, the statistical office added.
Even with fiscal policy turning more supportive again, construction activity will come under pressure in the coming quarters as the recent boom in property development unwinds, Julian Evans-Pritchard, an economist at Capital Economics, said.
Combined with increasing headwinds from US tariffs and weaker global growth, this is likely to culminate in a further slowdown in economic growth over the coming year, the economist noted.
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