China GDP Grew 6.3% in the Second Quarter, Retail Growth Slowed Sharply in June
China announced that second-quarter GDP registered 6.3 percent year-over-year growth.
The latest figure, announced Monday morning, missed analysts’ estimate of 7.3 percent, according to a Reuters poll of economists, and marked a 0.8 percent growth from the previous quarter, slower than the 2.2 percent quarterly growth rate seen in the first three months of the year.
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Following the GDP data release, the renminbi fell 0.3 percent against the dollar.
Citing complex global geopolitical and economic environments, a cooling real estate market, National Bureau of Statistics spokesperson Linghui Fu said China is still on track to achieve its full-year growth target of around 5 percent, higher than 2022’s 3 percent growth.
According to Moody’s Analytics, the “pandemic hangover” is still plaguing China’s recovery story.
“Households are wary of spending, consumers remain skeptical about the recovery, and expectations relating to employment and income gains have turned negative,” Moody’s Analytics wrote in a research note.
China’s youth unemployment rate hit a record high of 21.3 percent in June.
To spur investment and consumption, China’s central bank in June announced plans to cut key lending rates. The last time China’s central bank eased rates was in August last year, following a two-month lockdown in Shanghai.
“We expect to see monetary policy ease in coming months and targeted fiscal supports given to key industries, including real estate and construction. But that extra support won’t be a silver bullet. Increasingly, 2023 is looking like a year to forget for China,” the Moody’s Analytics report added.
Retail sales slowed sharply in June, which increased 3.1 percent year-over-year, compared to a surge in May, which grew 12.7 percent.
Sales for clothing softened from May’s 17.6 percent growth to June’s 6.9 percent growth.
Cosmetics registered 4.8 percent growth in June, compared to 11.7 percent in May. Gold and silver rose 7.8 percent, compared to 24.4 percent in May. Retail sales of catering, sports and enterntainment, along with tobacco and alcohol, rose the most.
For the first half of 2023, retail sales expanded 8.2 percent year-over-year to 22,758 billion renminbi, or $3.17 billion, according to the National Bureau of Statistics.
Online retail totaled 7.16 billion renminbi, or $999 million, in the first six months of 2023, a 13.1 jump year-over-year. E-commerce currently accounts for 26.6 percent of overall retail sales in China.
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