China Growth Slows In Q2 Amid Debt Crackdown, Trade Tensions
July 16 2018 - 12:47AM
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China's economic growth slowed in the second quarter, as the
government's efforts to rein in debt damped activity, while
production slowed adding fuel to concerns over an escalating trade
war with the US.
Gross domestic product expanded 6.7 percent year-on-year in the
three months to June after growing 6.8 percent in the first
quarter, data from the National Bureau of Statistics showed Monday.
Growth was in line with economists' expectations. The pace of
expansion was the slowest since the third quarter of 2016, when the
economy grew 6.7 percent. Growth stayed within the 6.7-6.9 percent
range for 12 quarters consecutively, the NBS said. On a seasonally
adjusted basis, GDP rose 1.8 percent quarter-on-quarter in the
second quarter of 2018, beating forecasts for an increase of 1.6
percent, and followed the rise of 1.4 percent in the three months
prior.
The economy expanded 6.8 percent year-on-year in the first half
of the year.
External uncertainties are increasing and economic restructuring
is in a phase of overcoming difficulties, the NBS noted.
The headline official indicators are now in broad agreement that
the economy is losing momentum, Capital Economics noted.
"The upshot is that the statistics bureau is now starting to
more publicly acknowledge that the economy is losing steam,"
Capital Economics economist Julian Evans-Pritchard said. "This
should make it easier for officials to justify a more supportive
policy stance."
The People's Bank of China reduced the reserve requirement ratio
thrice this year and the biggest cut was a 50 basis points
reduction for some banks in June. The central bank will now think
of slashing benchmark lending rates in the coming months, the
economist said.
The NBS also said that retail sales advanced an annual 9.0
percent in June, exceeding expectations for 8.8 percent and up from
8.5 percent in May.
Industrial production gained 6.0 percent on year, shy of
forecasts for 6.5 percent and down from 6.8 percent in the previous
month.
Fixed asset investment gained 6.0 percent on year, in line with
expectations and down from 6.12 percent a month earlier.
The surveyed unemployment rate in urban areas was 4.8 percent in
June, same as in May.
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