China Q2 GDP Growth Misses Expectations

(RTTNews) - As the re-opening boost started to fade, China's economy expanded at a slower-than-expected pace in the second quarter, strengthening the call for more stimulus that prop up domestic demand.

Gross domestic product logged an annual growth of 6.3 percent in the second quarter, faster than the 4.5 percent expansion in the first quarter, the National Bureau of Statistics reported Monday. However, this was weaker than the economists' forecast of 7.3 percent.

On a quarterly basis, GDP rose 0.8 percent, which was slower than the 2.2 percent growth in the first quarter. The economy was expected to grow 0.5 percent.

During the January to June period, GDP grew 5.5 percent from the previous year, which was still above Beijing's full year growth target of around 5.0 percent.

Continued weakness in the property sector, possible loosening in the labor market and few signs of broad-based stimulus suggest output over the rest of the year is shaping up to be weaker than anticipated, Capital Economics' economist Sheana Yue said.

In June, industrial production posted an increase of 4.4 percent from a year ago, better than the expected 2.7 percent growth. Output had increased 3.5 percent in May.

At the same time, retail sales growth decelerated to 3.1 percent from 12.7 percent. Moreover, this was slightly weaker than the forecast of 3.2 percent.

In the first half of the year, fixed asset investment grew 3.8 percent compared to expectations of 3.5 percent.

The NBS reported that property investment declined further in the first half of the year. Investment was down 7.9 percent from the previous year, bigger than the 7.2 percent fall in the January to May period.

Data showed that the urban surveyed unemployment rate remained at 5.2 percent in June. The youth unemployment rate rose to a record 21.3 percent in June.

The People's Bank of China added CNY 103 billion into the banking system through one-year medium term lending facility on Monday.

The central bank kept the rate on MLF unchanged at 2.65 percent. The bank had last reduced the MLF rate by 10 basis points in June.

The PBoC also conducted seven-day reverse repos of CNY 33 billion at an interest rate of 1.9 percent.