SHANGHAI, China, Oct. 18 (.) – China’s economy grew by 0.9% in the third quarter, two-tenths more than between April and June. Although this figure was slightly lower than experts expected, it still represents a step forward for China’s economy. The economy is poised to return to high growth rates, supported by a new stimulus package approved by the government.
Experts predict that China’s economy will grow by 1 percentage point, despite growth two-tenths higher than in the second quarter, and given the fragile recovery, it is likely to grow even further. They will likely seek stimulus checks.
Considering annual data, GDP at the end of this third quarter increased by 4.6 percent, lower than the achievement rate of the previous two quarters: 5.3 percent in the first quarter and 4.7 percent in the second quarter.
However, the National Statistics Office (ONE) said that despite the “complex and serious external environment” and the fact that “new circumstances and new problems” have already arisen, there is a “stable growth trend” and the economy is He talked about the “positive factors” that promote recovery. In national economic development. ”
The major economic indicators for September released today also exceeded expectations. Industrial production rose from 4.5% to 5.4%, with similar trends seen in retail sales (2.1% to 3.2%) and urban unemployment rate (5.3% to 5.1%). ).
Fixed asset investment, which had been on the decline in recent months, increased by only 3.4% from January to September. The amount allocated to real estate investments decreased by 10.1% compared to the same month last year, but the decline was 0.1 percentage points lower than that recorded in August.
In any case, ONE reiterated its usual warning that “the foundations for a solid economic recovery and growth still need to be strengthened.”
And this data is under unfavorable conditions. That’s why Chinese authorities took the initiative a few weeks ago to announce a series of stimulus measures aimed at boosting consumption, stemming a real estate crisis and supporting market values. .
Fiscal stimulus on hold
Some experts believe the measures are “a step in the right direction” but “not enough” to restore China’s economic recovery unless accompanied by increased public spending.
Zhang Ziwei, an economist at Pinpoint Asset Management, asserts that the push for stimulus stems from authorities’ concerns about the possibility of missing this year’s official growth target of “about 5%.” . This trend continues. ”
Following this announcement, Goldman Sachs (NYSE:) raised its forecast for China’s GDP growth in 2024 to 4.7% to 4.9%, although key details such as the final size of the fiscal stimulus package are still unclear. Increased to %. The International Monetary Fund and World Bank’s latest forecasts are 5% and 4.8%, respectively.
In light of this situation, Chinese President Xi Jinping even asked Communist Party authorities to “take all measures” in the fourth quarter to “achieve the goal” in 2024.
Capital Economics’ Fan Zichun believes that after a quarter in which the economy once again “regained its coasting,” fiscal stimulus will help the Chinese government meet its annual goals and support activity in the coming quarters. However, this will not prevent growth from slowing down again at the end of next year.
“The fundamentals of the (economic) recovery remain shaky,” he said, adding that “much will depend on the application of these fiscal stimulus measures.”
“The Treasury did not provide specific numbers on the size of the fiscal stimulus package (…), but it pledged to use existing funds to expand fiscal spending in the fourth quarter and “This was a year that signaled a widening of the deficit,” explains Hwang.
Weak domestic and international demand, along with the risk of deflation, a lack of economic stimulus, an unyielding real estate crisis, and consumer and private sector distrust, are among the factors that analysts consider to explain the global situation. This is part of the reason for using it. The world’s second largest economy.
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