China reported that the country’s GDP grew by 3.2%
July 16, 2020 @ 12:39 +03:00
China reported that the country’s GDP grew by 3.2% in the second quarter of this year, compared to a year ago — beating analysts’ expectations and rebounding from the first quarter’s contraction. It comes as lockdowns to contain the coronavirus outbreak in China eased, and as Beijing rolled out stimulus measures to prop up its economy. Economists polled by Reuters expected gross domestic product to have grown modestly at 2.5% in the April to June quarter.
China’s first quarter GDP contracted by 6.8% in 2020 from a year ago as the world’s second largest economy took a huge hit from the coronavirus outbreak. This was the country’s first GDP decline since at least 1992, when official quarterly records started. China’s official GDP figures are tracked as an indicator of the health of the world’s second-largest economy, but many outside experts have long expressed skepticism about the veracity of China’s reports. The Chinese government has introduced measures to boost the economy including fiscal spending and cuts in lending rates and banks’ reserve requirements — the amount of cash that lenders must hold in reserve.
Recent data out of China show some signs of recovery. Trade numbers in June showed that China’s dollar-denominated exports and imports rose. Manufacturing activity in June also expanded compared to May, two different sets of surveys showed. Chinese exports have been getting “massive market share” while the rest of the world was locked down, said Bo Zhuang, chief China economist at TS Lombard before the data release. China started easing lockdown measures earlier than other countries.
Zhuang said he expected China’s GDP recovery to be sustainable in the next two quarters at least, as the domestic economy seems to be doing “fine” with growth in infrastructure and cross-provincial travel reopened, he told CNBC’s “Street Signs.” Zhuang said a recovery of about 5% in the next two quarters is “definitely foreseeable.” China’s full-year GDP growth was 6.1% in 2019.
Concerns over the job market and the lagged impact of bankruptcies continue to hang over the economy. Looking ahead, there is a question of how much China domestic demand can offset the accumulation in inventory due to weak external demand. The world economy is expected to fall into recession this year as many governments globally have implemented lockdowns and limited business activity and social gatherings. Slowing growth in global demand is expected to hurt Chinese exports. This year, China made a rare decision not to set a GDP target due to uncertainties from the impact of the pandemic.
China says its economy grew 3.2% in the second quarter this year, rebounding from coronavirus, CNBC, Jul 16