China GDP up 6.3% in Q2 thanks to retail upswing
Year-on-year expansion also boosted by weak economy during zero-COVID era
SHANGHAI -- China's economy expanded by 6.3% in the second quarter from a year earlier, fueled by recoveries in retail sales and the service sector, and partly thanks to a low base effect.
The GDP growth announced by the country's statistics office on Monday was lower than the average market forecast of 6.9% as tabulated by Nikkei and QUICK, and surpassed the 4.5% rise in the first quarter.
China posted 0.4% growth in the second quarter of last year as COVID-19 lockdowns restricted business activities.
Preliminary data showed exports having contracted by 5.2% and imports by 6.9% as trade with major destinations including the U.S., E.U. and Southeast Asia declined sharply. Exports to the U.S. fell by 16.7%, while imports declined by 5.8%.
There is a consensus among economists that China's post-pandemic recovery has been disrupted by a global slowdown as well as tepid domestic demand.
In a China Business Outlook survey by rating agency S&P released on Sunday, confidence among respondents fell to 23% from 34% in February. The number was also lower than the 28% on a global level.
"Hiring and investment plans were also trimmed compared to February," said Annabel Fiddes of S&P, adding that respondents expected selling prices to rise at a slower pace due to lower inflationary pressure.
China's consumer price index posted zero growth in June, raising concerns about deflation amid restrained household spending and a sluggish job market.
The government is forecasting growth of around 5% this year, a modest target after the economy expanded by 3% in 2022, one of the weakest annual performances in decades.