The 6.3% growth in China’s gross domestic product from April to June compared to the same period in 2022 was the fastest in the past year, and outpaced the 4.5% growth in the previous quarter, according to government data released Monday. However, the growth reading missed analyst expectations and the momentum is expected to weaken in the coming quarters.
“The GDP data is a little hard to interpret because the year-on-year number was significantly weaker than I expected but the quarter-on-quarter number, as reported by the NBS, is a little higher than what I expected, so I’m trying to see if they have revised some of the earlier data,” said Louis Kuijs, Chief Asia Economist at S&P Global. “Another observation is that the consumption side is disappointing. We had double-digit retail sales growth in April and May from a very low base, and that has petered out to have only 3.1% nominal retail sales growth, indicating consumers remain quite reluctant.”
The 6.3% growth in the world’s largest economy outpaced India’s 6.1% economic expansion in January to March. India will release data for April to June next month.
Beijing’s National Bureau of Statistics said in a statement that the economy “showed a good momentum of recovery”.
The on-year surge came largely due to China’s GDP growing just 0.4% a year ago, amid strict lockdowns in cities like Shanghai during China’s worst COVID-19 outbreak of the pandemic. However, the the economy grew 0.8% in the second quarter compared to the first three months of the year.Analysts had forecasted growth for the quarter ended June to exceed 7%.The yuan fell about 0.37% to 7.1680 per dollar. The yuan recently hit 8-month lows, pressured by the firming U.S. dollar and a flurry of weaker-than-expected weak Chinese data. It has lost more than 3% to the dollar so far this year, Reuters said.
Chinese stocks fell, with benchmark Shanghai Composite index and blue-chip CSI 300 Index both dropping more than 1%.
China’s GDP in the first quarter beat expectations and grew by 4.5%, as consumers flocked to shopping malls and restaurants after nearly three years of “zero-COVID” restrictions were removed at the end of 2022.
But analysts expect the growth to slow, amid a 12.4% slump in exports in the second quarter.
(With inputs from AFP and Reuters)
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