China's economic growth lower than expected, 5% target facing difficulties

Official data released on July 15 showed that China's economy grew 4.7% in the second quarter of 2024 compared to the same period last year, lower than the 5.1% growth forecast by analysts from the UK's Reuters news agency.

China's economy faces many uncertainties and increasing difficulties. In photo: Beijing streets. (Photo: Linh Chi)

China's gross domestic product (GDP) grew 0.7% in April-June 2024 from a year earlier, below the 1.1% growth forecast and compared with a revised 1.5% growth in the previous quarter.

Analysts predict that policymakers will have to take further measures to support the economy amid a slowing property market, rising local government debt and weak private sector spending.

Analysts at Citi Bank said that before the data was released, weakening domestic demand could continue to put pressure on inflation and start to weaken manufacturing activity.

All eyes are likely to be on the third plenum and Politburo meeting of China this July.

The government is targeting economic growth of around 5% in 2024 - a target many analysts say is ambitious and may require more stimulus measures.

The target is “difficult to achieve” in the first half of this year as businesses are under relatively great pressure and key economic sectors are facing many risks, the National Bureau of Statistics said on its website.

In addition, China's economic growth in the second quarter was also affected by short-term factors such as extreme weather and floods.

To cope with weak domestic demand and the real estate crisis, the world's second-largest economy has recently increased infrastructure investment and poured money into high-tech manufacturing.

China's economic growth in 2024 will be uneven, with industrial output outpacing domestic consumption, raising the risk of deflation amid a slowing property market and rising local government debt.

Meanwhile, consumer prices rose for the fifth consecutive month in June 2024, but missed expectations, while factory deflation persisted, as government measures have not been sufficiently effective in boosting domestic demand.

Source: https://baoquocte.vn/kinh-te-trung-quoc-tang-truong-thap-hon-du-bao-muc-tieu-5-gap-kho-278755.html