China’s economy expanded at its slowest rate in over a year during the third quarter, even with an uptick in retail sales, as the property sector continued to hinder growth significantly.
According to data released by the National Bureau of Statistics on Friday, the gross domestic product increased by 4.6 percent year-on-year in the third quarter, marking the weakest growth since the first quarter of 2023.
This growth rate was in line with expectations, but it was slightly lower than the 4.7 percent growth recorded in the previous quarter.
On a quarterly basis, GDP rose by 0.9 percent, which was below the anticipated growth of 1.0 percent.
From January to September, the economy achieved an annual growth rate of 4.8 percent, compared to the government’s target for the full year of around 5 percent.
In September, industrial production increased by 5.4 percent, following a rise of 4.5 percent in the previous month, exceeding economists’ forecasts of 4.6 percent.
Retail sales growth accelerated to 3.2 percent, up from 2.1 percent the month before, outperforming expectations of a 2.5 percent increase.
For the three months ending in September, growth in fixed asset investment held steady at 3.4 percent, consistent with the prior period.
The property market remained the largest obstacle to growth, with property investment declining by 10.1 percent year-on-year.
The unemployment rate dropped to 5.1 percent in September, contrary to expectations that it would hold steady at 5.3 percent.
According to Zichun Huang, an economist at Capital Economics, some fiscal stimulus measures should assist in narrowly achieving the annual growth target this year and maintain activity in the next quarter.
However, he cautioned that this is unlikely to prevent growth from decelerating again by the end of next year.
Earlier in the day, major state-owned commercial banks in China lowered their deposit interest rates by 25 basis points.
Recently, Beijing announced a series of fiscal stimulus initiatives and relaxed home-buying restrictions. Additionally, the People’s Bank of China has decreased key interest rates and increased lending support.
Markets are now anticipating detailed plans for the fiscal stimulus measures introduced last Saturday. While the government has not disclosed specific figures regarding the stimulus size, it has indicated a potential expansion of the budget deficit for the next year.
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