Thursday, June 20, 2024

China’s economy grew by a better-than-expected 4.9% in the third quarter


China’s economy

China’s economy grew a faster-than-expected 4.9 percent in the third quarter, official data showed on Wednesday, suggesting the recent recovery may be enough to meet Beijing’s full-year growth target.

A sharp weakening of growth in the world’s second-largest economy since the second quarter has led Chinese authorities to step up support measures for the economy, with a set of data released on Wednesday showing stimulus is starting to gain momentum despite a real estate crisis. And other headwinds still pose hazards to the outlook.

Data released by the National Bureau of Statistics showed gross domestic product grew by 4.9 percent in the July-September period compared to a year earlier.

Economists polled by Reuters had expected growth of 4.4 percent, but that was slower than the 6.3 percent growth seen in the second quarter of this year.

On a quarterly basis, China’s gross domestic product grew 1.3 percent in the third quarter, accelerating from a revised 0.5 percent in the second quarter and beating Reuters’ forecast of 1 percent.

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In the first nine months of the year, the Chinese economy grew by 5.2 percent compared to the same period last year, indicating that it is on track to meet Beijing’s target of 5 percent growth in 2023.

In this context, officials from the National Bureau of Statistics (China’s National Bureau of Statistics) have warned that the external environment has become “more complex and dangerous” and that domestic demand is still insufficient.

Stephen Innes, managing partner at SBI Asset Management, said that while the figure beat expectations, the Chinese economy was “by no means out of the woods”.

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He added, “This growth represents a modest improvement in the Chinese economy. However, there are continued calls for increased policy support to sustain growth, as there are concerns about the sustainability of this recovery.”

For his part, Matt Simpson, chief market analyst at CitiIndex, told Reuters: “All these stimuli are finally starting to have an impact, with broader implications for growth in retail sales, industrial production and unemployment.”

As policymakers grapple with a local real estate crisis, high youth unemployment, weak confidence in the private sector, slowing global growth, and Sino-US tensions over trade and technology, the Chinese government is scrambling to restore economic balance. and geopolitical tensions.

In recent weeks, Beijing has unveiled a slew of measures, but its ability to spur growth has been hampered by concerns about credit risks and a weak yuan, which has been hit hard this year by widening yield spreads as global interest rates rise. by the United States because of the aggressive campaign by the Federal Reserve to fight inflation.

The pace of the Chinese economy’s recovery suggests it is likely to reach the government’s growth rate target of five percent for 2023.

If growth exceeds 4.4 percent in the fourth quarter, China could meet its growth target for 2023, the statistics office said.

Separate data showed industrial production grew 4.5 percent year-on-year in September, beating expectations, but unchanged from August. Analysts expect this growth to reach 4.3 percent.

Retail sales growth, a measure of consumption, beat expectations and rose 5.5 percent last month, accelerating from 4.6 percent growth in August. Analysts expect retail sales to increase by 4.9 percent.

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Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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