China is expected to report a slowdown in economic growth for the second quarter, adding pressure on leaders ahead of a pivotal policy meeting next week. Economists surveyed by Bloomberg anticipate that China’s GDP grew by 5% in Q2 2024, marking the slowest quarterly growth in three quarters. Despite this, the first half of the year is likely to meet Beijing’s annual growth target of around 5%.
Factors contributing to the slowdown include sluggish domestic demand in June, with both production and consumption expected to cool from previous months. The ongoing contraction in the property sector further complicates economic prospects.
The upcoming third plenum of the Communist Party, delayed due to unusual circumstances, is expected to address these challenges. Economists suggest that policies to revive the property market, enhance technology self-sufficiency, and alleviate local fiscal pressures will be on the agenda.
Looking ahead, the outlook for the second half of the year remains uncertain. Trade tensions pose a threat to export growth, while efforts to manage a burgeoning debt burden and cool bond market rallies present additional challenges.
Key economic indicators for June are expected to show a broader slowdown, with industrial production, retail sales, and fixed-asset investment all likely to exhibit weaker growth compared to previous months. Property investment, in particular, is forecasted to decline sharply, deepening concerns about the sector’s stability.
Analysts project that GDP growth could further decelerate in the latter half of 2024, potentially reaching 4.7% in Q4. The fate of the real estate market will be critical to overall economic performance, with expectations of further stimulus measures to stabilize the sector.
While exports have been resilient, uncertainties persist amid escalating trade tensions with major partners. Meanwhile, the People’s Bank of China’s cautious monetary policy stance and efforts to manage liquidity add to economic uncertainties.
In conclusion, China’s economic landscape faces significant challenges requiring strategic policy responses to sustain growth momentum amidst global economic headwinds.
