China's Q2 GDP Grows 4.3% Year-on-Year, Lowest in 3.5 Years

China's National Bureau of Statistics announced today that the country's second-quarter GDP grew 4.3% year-on-year, below the market expectation of 4.5% and the lowest since the fourth quarter of 2020—3.5 years ago. The GDP growth for the first half of 2023 was 4.7% year-on-year.

According to a Reuters survey, analysts had forecasted a 4.5% year-on-year increase for Q2, down from 5.0% in Q1. This marks the weakest quarterly growth since Q4 2022, when China was still grappling with the impacts of the COVID-19 pandemic.

On a seasonally adjusted quarterly basis, GDP rose 0.9%, in line with analyst expectations but down from 1.3% in the previous quarter.

Reuters reported that industrial production remained strong, driven by AI-related exports, but consumer spending and investment were weighed down by the prolonged downturn in the real estate sector and global oil price shocks.

Data from China's National Bureau of Statistics showed that in June, value-added industrial output for enterprises above designated size increased 5.3% year-on-year, accelerating by 0.8 percentage points from the previous month and surpassing the market expectation of 4.7%.

Retail sales of consumer goods in June rose 1.0% year-on-year, reversing a 0.6% decline in May and marking the fastest growth in three months. Analysts had expected a 0.1% decline.

Fixed asset investment in the first half of the year fell 5.7% year-on-year, worse than the expected 4.9% decline. Fixed asset investment excluding real estate development dropped 2.7%. The property sector remains weak, with real estate development investment down 18% year-on-year in the first half, widening from the 16.2% decline in the first five months of the year.

The average urban survey unemployment rate in the first half of 2023 was 5.2%. In June, the urban survey unemployment rate was 5.0%, down 0.1 percentage points from the previous month.