China’s Q2 Growth Slows to 4.7%

China’s economy grew much slower than expected in the second quarter dragged down by a prolonged property crisis and job insecurity despite a strong beginning to the year.

It led to expectations that Beijing may need to unleash even more stimulus.

Official data showed the world’s second-largest economy grew at 4.7% – the slowest since the first quarter of 2023 and missing a 5.1% forecast.

The years-long property downturn deepened in June as new home prices fell at the fastest pace in nine years.

Particular worry surrounds growth in retail - businesses were forced to slash prices on everything from clothes to cars under deflationary pressure.

Analysts say to expect cutting debt and boosting confidence to be the main focus at this week's Third Party Plenum, a key economic meeting that happens every five years.

The government has been aiming for economic growth of 5% in 2024, a target that many think is too ambitious.

To counteract weak domestic demand and property problems China has already increased infrastructure investment and is focusing on high-tech manufacturing.

Though now, analysts at Citi, polled say they expect further measures to support property are coming after a meeting of the Politburo later this month.

China's central bank maintained the one-year medium-term lending facility (MLF) rate -- at which it lends to financial institutions to boost liquidity -- at 2.5%.

In response to the disappointing GDP numbers, Oxford Economics observed that "ineffective transmission of cautious policy easing efforts and the overhang of property weighed on the Chinese economy in Q2, despite the promising start to the year."

stagnating household credit growth, consumer confidence, and personal savings rates hint at no sign of a genuine recovery yet.