China’s economic recovery accelerated in the July-September quarter, underpinned by a rebound in domestic consumption. However, the growth is still slower than expected, highlighting persistent challenges for the world’s second-largest economic powerhouse. According to data from the National Bureau of Statistics (NBS) published on Monday, China’s GDP expanded 4.9% in the third quarter from a year earlier, missing analysts’ forecast of a 5.2% growth.
The economy grew 0.7% year-on-year (YoY) in the first three quarters of 2020, NBS data showed. On a quarterly adjusted basis, China’s GDP increased 2.7% YoY in the third quarter, compared with economists’ estimates of a 3.2% raise and an 11.5% expansion in the second quarter. The slower-than-expected growth capped gains in yuan and major stock indexes. The benchmark Shanghai index rose 0.6%, while the CSI300 was up 0.8%. Both indexes gained 1% and 1.2%, respectively, in the previous session.
On the bright side, several indicators pointed to a wider uptrend in consumption. Retail sales increased 3.3% YoY in September, the fastest growth since December 2019 and accelerating from a 0.5% YoY increase in August. Last month, auto sales marked a sixth consecutive month of gains with a robust 12.8% expansion. Industrial production expanded 6.9% YoY last month, compared to a 5.6% YOY rise in August.
Fixed-asset investment increased 0.8% YoY in the January-September period, after dropping 0.3% in the January-August period. Investment in the property sector gained 12% YoY last month. The IMF expected China’s GDP to grow 1.9% for the full year, in line with the central bank’s projection of 2% growth. This will mean that China is the only major economy to report positive growth this year, although the growth is the slowest since 1976, the last year of the Cultural Revolution.
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Published on October 19, 2020 5:05 PM (GMT+8)Last Updated on October 19, 2020 5:05 PM (GMT+8)
