China’s economy grew 4.9 percent faster than expected in the third quarter, official data showed Wednesday, suggesting a recent recovery may be enough for Beijing to meet its full-year growth target.
The rapid weakening of growth in the world’s second-largest economy since the second quarter has led Chinese authorities to step up support steps for the economy, with a set of data released Wednesday indicating that stimulus is starting to gain momentum, although the real estate crisis and other headwinds still pose risks to the outlook.
Data issued by the National Bureau of Statistics showed that the gross domestic product grew by 4.9 percent in the period from July to September, compared to the previous year.
Economists polled by Reuters had expected growth of 4.4 percent, but slower than the 6.3 percent growth in the second quarter of this year.
On a quarterly basis, China’s gross domestic product grew 1.3 percent in the third quarter, accelerating from a revised 0.5 percent in the second quarter and higher than Reuters’ forecast of 1 percent.
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In the first nine months of the year, the Chinese economy grew by 5.2 percent, compared to the same period last year, indicating that it is on track with Beijing’s goal of 5 percent growth in 2023.
In this context, officials from the National Bureau of Statistics (China’s National Bureau of Statistics) warned that the external environment has become “more complex and dangerous”, and that domestic demand is still insufficient.
Stephen Innes, managing partner at SBI Asset Management, said that although the numbers exceeded expectations, the Chinese economy was “by no means out of the woods.”
He added, “This growth indicates a modest improvement in the Chinese economy. However, there are continuing calls for increased policy support to maintain growth, as there are concerns about the sustainability of this recovery.”
For his part, Matt Simpson, chief market analyst at City Index, told Reuters: “It appears that all this stimulus is finally starting to have an impact, with a broad impact on the growth of retail sales, industrial production and unemployment.”
The Chinese government is walking a tightrope in its attempt to restore economic balance, as policymakers must deal with the local real estate crisis, high youth unemployment, weak confidence in the private sector, slowing global growth, Sino-American tensions over trade and technology, and geopolitical tensions.
In recent weeks, Beijing has unveiled a range of measures, but its ability to stimulate growth has been hampered by concerns about debt risks and the fragile yuan, which has been hit hard this year by widening yield spreads as global interest rates remain high, led by America due to the Federal Reserve’s tightening campaign to combat… Inflation.
The momentum of recovery in the Chinese economy suggests that the government’s growth rate target for all of 2023 of five percent is likely to be achieved.
The statistics office said that China will be able to reach its growth target for 2023 if growth in the fourth quarter exceeds 4.4 percent.
Separate data showed that industrial production in September grew 4.5 percent year-on-year, above expectations, but the pace was unchanged from August. Analysts expected this growth to reach 4.3 percent.
Retail sales growth, a measure of consumption, also exceeded expectations and rose 5.5 percent last month, accelerating from 4.6 percent growth in August. Analysts expected retail sales to grow by 4.9 percent.
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2023-10-18 06:34:24
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