BEIJING: China’s economy grew at its slowest pace in a year in the third quarter, hurt by power shortages, supply constraints and sporadic Covid-19 outbreaks, and the heat on policymakers came amid growing panic in the property sector.
Data released on Monday showed gross domestic product (GDP) grew 4.9% in July-September compared to earlier, the weakest pace since the third quarter of 2020 and slower than the 7.9% in the second quarter.
It marked another slowdown by an expansion of 18.3% in the first quarter, when the year-on-year growth rate was much flatter than the much smaller comparison seen during the Covid-induced slowdown in early 2020.
A Reuters poll of analysts had expected GDP to grow 5.2% in the third quarter.
On a quarterly basis, the growth slowed to 0.2% in July-September, from a revised 1.2% in the second quarter, the data showed.
The world’s second-largest economy has bounced back from the pandemic, but the recovery is losing steam, faltering factory activity, persistently soft consumption and a slowing asset sector as policy curbs loom.
“In response to the ugly growth we expect in the coming months, we expect policymakers to take further steps to accelerate growth, including ensuring adequate liquidity in the interbank market, accelerating infrastructure development and loosening some aspects of overall debt and real estate policies,” said Louis Kuijs, head of Asia economics at Oxford Economics.
Global concerns about a potential spillover of credit risk from China’s property sector into the broader economy have also intensified as major developer China Evergrande Group wrestles with more than $300 billion in debt.
Policy sources and analysts said Chinese leaders fear a persistent asset bubble could undermine the country’s long-term climb, with the sector likely to maintain tighter restrictions even as the economy slows, but as needed. Some may soften the strategy.
Prime Minister Li Keqiang said on Thursday that China has enough resources to deal with economic challenges despite slow growth and the government is confident of achieving its full-year development goals.
Analysts polled by Reuters expect the PBOC to keep banks’ reserve requirement ratios (RRR) unchanged in the fourth quarter, before cutting them by 50-basis points in the first quarter of 2022.
September’s industrial output rose 3.1% from a year earlier, short of expectations and down from August’s 5.3%. Retail sales rose 4.4% in September, up from 2.5% in August.
Data released on Monday showed gross domestic product (GDP) grew 4.9% in July-September compared to earlier, the weakest pace since the third quarter of 2020 and slower than the 7.9% in the second quarter.
It marked another slowdown by an expansion of 18.3% in the first quarter, when the year-on-year growth rate was much flatter than the much smaller comparison seen during the Covid-induced slowdown in early 2020.
A Reuters poll of analysts had expected GDP to grow 5.2% in the third quarter.
On a quarterly basis, the growth slowed to 0.2% in July-September, from a revised 1.2% in the second quarter, the data showed.
The world’s second-largest economy has bounced back from the pandemic, but the recovery is losing steam, faltering factory activity, persistently soft consumption and a slowing asset sector as policy curbs loom.
“In response to the ugly growth we expect in the coming months, we expect policymakers to take further steps to accelerate growth, including ensuring adequate liquidity in the interbank market, accelerating infrastructure development and loosening some aspects of overall debt and real estate policies,” said Louis Kuijs, head of Asia economics at Oxford Economics.
Global concerns about a potential spillover of credit risk from China’s property sector into the broader economy have also intensified as major developer China Evergrande Group wrestles with more than $300 billion in debt.
Policy sources and analysts said Chinese leaders fear a persistent asset bubble could undermine the country’s long-term climb, with the sector likely to maintain tighter restrictions even as the economy slows, but as needed. Some may soften the strategy.
Prime Minister Li Keqiang said on Thursday that China has enough resources to deal with economic challenges despite slow growth and the government is confident of achieving its full-year development goals.
Analysts polled by Reuters expect the PBOC to keep banks’ reserve requirement ratios (RRR) unchanged in the fourth quarter, before cutting them by 50-basis points in the first quarter of 2022.
September’s industrial output rose 3.1% from a year earlier, short of expectations and down from August’s 5.3%. Retail sales rose 4.4% in September, up from 2.5% in August.
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