China posts slowest GDP growth in more than three years
BEIJING, July 20. China's economy expanded at its weakest pace in more than three years in the second quarter, official data showed, with the result falling at the low end of the government's annual target range. Monthly economic indicators had already flagged widening pressure before the quarterly figure was released.
Key takeaways
- China's economy grew at its slowest pace in more than three years in the second quarter, according to official data.
- The second-quarter GDP figure came in at the low end of the government's annual growth target range.
- Because Q2 landed at the bottom of the target band, the economy is tracking at the minimum pace consistent with the full-year target.
- Monthly economic indicators had already flagged widening pressure before the quarterly GDP figure was released.
- Further weakness in the third or fourth quarter would put the full-year growth objective at risk.
BEIJING, July 20. China's economy expanded at its weakest pace in more than three years in the second quarter, official data showed, with the result falling at the low end of the government's annual target range. Monthly economic indicators had already flagged widening pressure before the quarterly figure was released.
A result at the floor of the target band
The second-quarter gross domestic product figure marked the slowest growth rate China has recorded in over three years. That the number came in at the low end of the annual target range, rather than near the midpoint or higher, changes what the quarterly report signals about the remainder of the year.
China sets an annual GDP growth target range. A quarterly reading in the upper portion of that range implies room to spare against the full-year commitment; a reading at the low end implies the opposite. With the second quarter at the bottom of the band, the economy is tracking at the minimum pace consistent with the annual target. Further weakness in the third or fourth quarter would put the full-year objective at risk.
Monthly economic indicators had been pointing in this direction before the Q2 figure arrived. Those series cover economic activity at a higher frequency than quarterly GDP and had collectively highlighted pressure throughout the period leading to the release. The quarterly number reflected what the monthly data had already been showing.
Monthly signals that preceded the print
Monthly indicators had flagged economic stress before the second-quarter result confirmed it. That sequence, monthly data showing deterioration followed by a quarterly confirmation, is now the backdrop against which the next set of monthly readings will be assessed.
The second-quarter figure, the weakest in more than three years, leaves the annual growth target intact but exposed. Whether conditions reflected in the monthly data stabilize in coming months will determine how much pressure that exposure creates for the full year.