China’s Q3 economic growth beats market forecast, headwinds persist

BEIJING: China’s economy grew at a faster-than-expected clip in the third quarter, data showed on Wednesday, while domestic consumption also picked up pace last month, suggesting the recent recovery may carry enough steam to reach Beijing’s full-year growth target.

The world’s second-biggest economy has started to show signs of stabilising thanks to a recent slew of policy measures, but a protracted property crisis, uncertainties over employment and household income and weak confidence among private firms pose risks to a durable revival.

Gross domestic product (GDP) grew 4.9% in July-September from the year earlier, data released by the National Bureau of Statistics showed, versus analysts’ expectations in a Reuters poll for a 4.4% increase but slower than the 6.3% expansion in the second quarter.

On a quarter-by-quarter basis, GDP grew 1.3% in the third quarter, accelerating from a revised 0.5% in the second quarter and above the forecast for growth of 1.0%.

The economy faltered in the second quarter after a brief post-COVID recovery, dragged by a property downturn and huge debt due to a decades-long infrastructure binge.

Beijing has in recent weeks unveiled a raft of measures, including more public works spending, interest rate cuts, property easing and efforts to shore up the private sector.

The government has set a full year 2023 growth target of around 5.0%.

Industrial output in September grew a stronger than expected 4.5% from a year earlier, but the pace was unchanged from August, according to the data. Analysts had expected a 4.3% increase.

Growth of retail sales, a gauge of consumption, also beat expectations, rising 5.5% last month, and accelerating from a 4.6% increase in August. Analysts had expected retail sales to expand 4.9%.

Fixed asset investment grew 3.1% in the first nine months of 2023 from the same period a year earlier, versus expectations for a 3.2% rise. It expanded 3.2% in the January-August period.

Property investment in the first nine months of 2023 fell by 9.1% from a year earlier, after slumping 8.8% in January-August, the data showed. – Reuters