China's growth accelerated with 6.3 percent despite difficult conditions

China announced on Monday an acceleration in its economic growth in the second quarter of the year, reaching 6.3 percent on an annual basis, despite the setback in the recovery in recent months and a series of disappointing indicators following the COVID-19 pandemic.

Analysts surveyed by AFP had expected stronger growth (7.1 percent) after a 4.5 percent increase in the first quarter in the world's second-largest economy following the lifting of health restrictions imposed to combat the COVID-19 pandemic.

However, the post-pandemic recovery, which has been delayed in some sectors, tends to slow down.

The youth unemployment rate in China, among individuals aged 16 to 24, reached a new record level in June at 21.3 percent.

Retail sales, the main indicator of household consumption, experienced further slowdown in June, as shown by figures from the National Bureau of Statistics.

Although the sales index recorded a 3.1 percent year-on-year increase, its pace was much slower than that recorded in May at 12.7 percent.

Economist Erin Xin from HSBC commented, "Consumption remains the engine of the recovery. The recovery was strong in some sectors, especially services," noting that spending was "weaker" compared to the pre-pandemic period.

Industrial production improved by 4.4 percent in June compared to 3.5 percent in the previous month.

In the second quarter, the figures for Gross Domestic Product (GDP) growth (+6.3 percent) benefit from the comparison with the previous year. In 2022, growth in the same quarter was modest at 0.4 percent, particularly affected by the lockdown imposed on the country's economic capital, Shanghai.

China has set a target for its GDP growth rate for this year at 5 percent, but achieving it may be challenging, according to Prime Minister Li Keqiang.

 

 

 

 

 

AFP