China's economy grew slightly more than expected in the second quarter of 2023, but growth still slowed substantially from the prior quarter as a post-COVID economic recovery ran out of steam.
China’s second quarter gross domestic product (GDP) grew 0.8% from the prior quarter, data from the National Bureau of Statistics showed on Monday.
The reading was slightly above expectations for growth of 0.5%, but slowed substantially from the 2.2% seen in the prior quarter.
On an annualized basis, GDP grew 6.3% in the second quarter, thanks largely to a lower basis for comparison from the same period last year, when the country was still struggling with the COVID-19 pandemic.
But the reading was lower than expectations for growth of 7.5%.
Still, the Chinese economy has now expanded a total 5.5% so far in 2023, thanks largely to a strong first quarter.
But growth slowed over the past three months, as the country’s biggest economic engines remained under pressure.
Manufacturing activity shrank for all three months in the second quarter, while real estate sales and home prices failed to pick up despite consistent policy support from the government.
China’s manufacturing sector has also come under pressure from sluggish overseas demand for Chinese exports, amid worsening economic conditions across the globe.
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The weak economic trends are widely expected to attract more stimulus measures from Beijing, with officials from the People’s Bank of China also reaffirming their support for the economy in recent weeks.
China’s economy is expected to grow a modest 5% in 2023, according to government forecasts.
But this will also largely hinge on how much policy support Beijing rolls out over the next two quarters, given that economic conditions are otherwise slowing in the country.
Other readings on Monday pointed to some resilience in the Chinese economy.
Industrial production grew 4.4% in June, more than expectations for growth of 2.7% and the prior month’s reading of 3.5%, while fixed asset investment also grew a bigger-than-expected 3.8% in June.
But retail sales disappointed for the month, with growth slowing drastically to 3.1% from a 12.7% jump in the prior month. (Source)
