Official economic data for the month of June provided further evidence that China is due to experience a slowdown in the second half of 2018, with GDP growth slowing to 6.7% year-on-year (y/y) in the second quarter – a seven-quarter-low.
The growth figure comes in line with the market estimate provided by a Bloomberg survey of analysts and marks a 0.1% drop from the first quarter. For the first half as a whole, China’s GDP grew 6.8% from the same time in 2017.
The month of June saw a slowdown across the board compared to May, offering a convincing case that China’s economic engine will stutter in the next six months. Industrial output, including that from factories, mining, and utilities, rose 6% y/y, down from 6.8% y/y in May.
Growth in fixed-asset investment edged down slightly to 6% y/y for the first half after growing at 6.1% y/y in the first five months of the year – significantly weaker than the 7.5% y/y growth seen in the first quarter. Investment associated with government-related projects, such as roads, railways, and energy infrastructure rose 7.3% y/y for the first half of 2018, down from 9.4% over the January-May period.
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