China: Annual GDP growth accelerates in the second quarter, but underlying momentum slows
GDP expanded 6.3% on an annual basis in Q2 (Q1: +4.5% year on year). Q2’s reading marked a two-year high, but undershot market expectations of a 7.0% expansion.
The services sector grew 7.4% annually in the second quarter, picking up from the first quarter’s 5.4% increase and marking the best reading since Q2 2021. In addition, the industrial sector gained steam, growing 5.2% in Q2 (Q1: +3.3% yoy). Agricultural sector growth was steady at 3.7% in Q2.
On a seasonally-adjusted quarter-on-quarter basis, economic growth moderated to 0.8% in Q2, following the previous period’s 2.2% growth.
Looking at June data, growth in retail sales slowed to 3.1%, while growth in industrial output and nominal fixed investment accelerated to 4.4% and 3.8% respectively. Meanwhile, a host of property indicators, including real estate investment, the sales area of commercial housing, and the real estate sentiment index, deteriorated in June.