Key facts
- China's Q2 GDP grew 4.3% year-on-year, missing the 4.5% market forecast.
- This marks the slowest growth pace since the fourth quarter of 2022.
- Weak domestic demand, particularly in consumption and property investment, was the primary driver of the slowdown.
- Industrial output rose 5.3% year-on-year in June.
- Retail sales saw a modest 1.0% year-on-year increase in June.
- Fixed asset investment fell 5.7% in the first half, with property investment down 18.0%.
China's economic growth decelerated sharply in the second quarter, with GDP expanding 4.3% year-on-year, missing analysts' expectations of 4.5% and marking the slowest pace since the fourth quarter of 2022. This slowdown, attributed to weak domestic demand, particularly in consumption and property, contrasted with stronger industrial output and exports.
Quarterly growth also cooled to 0.9% from 1.3% in the first quarter. While June industrial output rose 5.3% year-on-year and retail sales saw a 1.0% increase, fixed asset investment fell 5.7% in the first half, with property investment down 18.0%.
Economists suggest that while the government may not significantly alter its policy stance, a Politburo meeting in late July is anticipated to provide further guidance on potential stimulus measures. The reliance on manufacturing and exports to offset weak domestic demand is becoming increasingly challenging as global growth cools.