China’s economy expanded at a 6.3% annual pace in the April-June quarter. Falling short of analysts’ expectations and reflecting a significant slowdown compared to the previous year. According to government data released on Monday, quarterly growth, the standard measure for major economies. The economy of China stood at 0.8%, aligning with projections but declining sharply from 2.2% in the January-June period.
The world’s second-largest economy is anticipated to face further deceleration in the coming months due to weaker demand for Chinese exports in other countries as their post-pandemic recoveries lose momentum.
China’s 6.3% GDP growth from April to June outperformed the 4.5% expansion recorded in the previous quarter. However, this relatively robust growth is largely attributed to the economy’s low base in April-June 2022 when strict lockdown measures were in place in Shanghai and other cities during COVID-19 outbreaks.
Analysts had anticipated growth of over 7% for the quarter ending in June. But the actual figures are significantly below those projections. Fu Linghui, spokesman for the National Bureau of Statistics, stated in a news conference on Monday that China is still recovering from the impact of the pandemic. He maintained that China can achieve its growth in economy target for the year, which is approximately 5%.
However, analysts are less optimistic. Moody’s Analytics economist Harry Murphy Cruise described the numbers as a “worrying result” for China’s struggling economy. It has been struggling to gain momentum. He added that China’s recovery is going “from bad to worse.” As the effects of the pandemic continue to affect the country’s economic performance.
China’s GDP growth exceeded expectations
While government spending is expected to provide support to key industries like real estate and construction. It is unlikely to be a panacea, according to Cruise. Marcella Chow, a global market strategist at J.P. Morgan Asset Management, suggested in a report that, in addition to increased government spending. Regulators could consider cutting interest rates to stabilize expectations and provide a boost to the economy.
China’s GDP growth in the first quarter exceeded expectations, reaching 4.5% as consumers returned to shopping malls and restaurants after nearly three years of “zero-COVID” restrictions were lifted in late 2022. The government’s growth target of “around 5%” has been seen as a conservative goal that can only be achieved if the economy maintains its current growth trajectory.
Earlier data revealed a 12.4% decline in exports in June compared to the previous year. Reflecting faltering global demand following interest rate hikes by central banks in the United States and Europe to curb inflation.