China’s gross domestic product (GDP) increased by 1.3 percent in the third quarter compared to the previous three months, more than analysts expected and faster growth than in the second quarter. The year-on-year growth rate slowed to 4.9 percent from a 6.3 percent pace in the previous quarter, mainly due to weaker exports and a deepening crisis in the real estate sector. This was announced today by China’s statistics bureau. However, even the year-on-year result is better than expected.
A softer growth rate?
According to Reuters, analysts had expected the year-on-year growth rate to ease to 4.4 percent. They had expected growth of one per cent quarter-on-quarter after a revised growth of half a per cent in the second quarter. The statisticians had initially said the economy grew by 0.8 per cent from April to June.
China has the world’s second-largest economy after the United States and has begun to show signs of stabilisation in recent months thanks to policy measures. Beijing has unveiled a series of stimulus measures in recent weeks, but its ability to boost growth has been limited by concerns about debt risks and the impact of a weaker yuan. The currency has been hit hard this year by a wider yield gap as interest rates remain elevated in the US and other major economies.
The threat of crisis
The crisis in the domestic property market, which accounts for about a quarter of GDP, is also a risk to a sustained recovery. High youth unemployment, reduced confidence in the private sector, slowing global growth and strained relations with the US over politics, trade and technology are also having adverse effects.
“The improvement in third-quarter economic data makes it less likely that the government will introduce stimulus measures in the fourth quarter as the five percent growth target will be met,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. He said the government’s and the market’s attention will shift to the growth outlook for next year.
Source: ČTK
