Oct 18, V7N- China's economy grew by 4.6% in the third quarter of 2024, marking the slowest pace since early 2023, as the country grapples with challenges like a struggling property sector, weak domestic demand, and slowing export growth. While this figure slightly exceeded forecasts of 4.5%, it fell below the 4.7% growth recorded in the second quarter. Industrial output and retail sales for September beat expectations, but the ongoing decline in the property sector continues to hinder overall economic recovery.

Economists, like Bruce Pang from JLL, noted that the data aligns with market expectations, considering the economic headwinds, and emphasize that the stimulus package announced in September will take time to make a significant impact. China's government has set a growth target of around 5% for 2024, but many analysts, including those in a Reuters poll, predict growth will come in lower, at around 4.8%, with a potential slowdown to 4.5% in 2025.

On a quarterly basis, China's economy grew by 0.9% in Q3, slightly below forecasts of 1.0%, and lower than the 0.7% growth in Q2. This performance raises concerns about meeting the 5% growth target, especially given the risks of deflationary pressures, weak consumer inflation, and deepening producer price deflation.

In response, Chinese authorities are ramping up fiscal and monetary stimulus efforts, including potential issuance of special sovereign bonds worth around 2 trillion yuan ($280 billion) and a series of aggressive measures introduced in late September. These steps include rate cuts and liquidity injections to support the property and stock markets, though the exact size and timing of the stimulus remain unclear. Markets are watching closely for further details on fiscal measures to boost consumption and revive growth.

END/WD/RH/