Rate cuts and other stimulus measures adopted by the government since late last year have started to work their way into the Chinese economy, as GDP in the second quarter rose 7% from a year ago, easily beating forecasts.
The April-June GDP growth was unchanged from the first quarter’s 7%, which was also the Chinese government’s official target for the whole of 2015, though that would mark the slowest pace of expansion in more than two decades.
“The national economy has been running within proper range and the major indicators picking up steadily, showing moderate but stable and sound momentum of development,” China’s National Bureau of Statistics, which released the data Wednesday morning, said in a statement published on its website.
Economists polled by both Reuters and Bloomberg pegged the second-quarter number at 6.9% and 6.8%, respectively. A separate survey by The Wall Street Journal also showed that growth would be at 6.8%.
The PBOC, China’s central bank, has lowered its policy rates four times since November and reduced the banks’ reserve requirement ratio twice since February to re-energize the sagging economy caused by the depressed property sector, weak factory output, rising bad loans, among others.
“Downside risks are getting smaller,” Bloomberg quoted Ding Shuang, chief China economist at Standard Chartered Plc in Hong Kong, as saying. “A modest recovery is expected in the second half.”
The data came out a just after Bank of America Merrill Lynch released its latest fund manager survey for July, as reported by NexChange. The survey showed that China is the leading source of worry among respondents as a net 62% said they expect Asia’s biggest economy to weaken in the next 12 months, while eight out of 10 said they expect GDP to rise less than 6% by 2018.
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