BEIJING – China’s economic growth is expected to have weakened as of the mid-year mark, once again stoking questions about whether policymakers will accelerate government spending to ensure they meet their annual target.
Economists see the government on July 15 reporting a 4.5 per cent gain in gross domestic product for the second quarter, according to the median forecast in a Bloomberg survey. That would be down from the 5 per cent year-on-year increase in the first three months of the year, and leave growth skirting the bottom of Beijing’s 2026 target range of 4.5 per cent to 5 per cent.
The slowdown reflects persistently weak consumer spending, a continuing slump in the housing market and declines in investment outside of favoured areas such as high-tech manufacturing. On a quarterly basis, growth is projected to moderate to 0.9 per cent, which would be the lowest since 2023.
Whether the figures prove concerning enough to President Xi Jinping and his team remains to be seen. Exports have proven resilient to both overseas trade protectionism and the Middle East war, and China’s manufacturers are among the beneficiaries of the global AI boom. One option would be to bring forward outlays pencilled in for later in 2026.
“There could be increased urgency to deploy the funds already approved for this year, but we aren’t expecting new approvals yet,” Lynn Song, chief greater China economist at ING Bank, wrote in a note ahead of the data.
Still, Premier Li Qiang, in a meeting with experts and entrepreneurs on July 13, didn’t rule out the potential for fresh measures. July’s expected gathering of the ruling Communist Party’s top decision-making body, the Politburo, may provide more clues on what steps are in the pipeline. BLOOMBERG
