China's Q2 Economic Growth Remains Subdued But Above Expectation
The economic recovery in China has faltered, and there's no doubt about it at all. During Q2 2023, the economy grew only a little bit higher than in Q1 2023 but was still higher than expectations.
From the surface, it appears that the economic powerhouse known as China is now running out of steam despite all the recent economic reforms and stimulus measures.
China's Q2 GDP Jumped By 0.8%
For the 2nd quarter of 2023, the GDP of China grew by 0.8% when compared with the Q1 of 2023. The reading for Q2 was higher than the 0.8% expected growth but was way lower than the 2.2% value of the prior quarter.
If we look at the annual GDP growth in China, the increase during Q2 was 6.3%. However, this only became possible due to the way this comparison this made and the fact that China was struggling with COVID-19 last year. Even then, the reading remained lower than the 7.5% expected growth.
In 2023 alone, China's GDP increased by 5.5%, mainly due to the strong results from Q1, as the Q2 results are dismal at best.
In the last three months, the growth was stalled and was witnessed in all the major economic sectors. For starters, the manufacturing activity declined during Q2 while the home prices and even real estate sales dropped as well.
According to experts, the sluggish demand for China's products around the world has put pressure on the Chinese manufacturing sector. In addition, the economic conditions around the world are also not so great, which is ultimately affecting global demand.
Looking ahead, more stimulus measures from China will likely occur in the next few months to rectify the economic problems. Similarly, the PBoC has already reaffirmed its support for the economy as well.
In 2023, China's GDP will likely expand by 5%, which is a modest forecast at best. However, even that would depend on how China shapes its policies in Q3 and Q4 2023.