China’s GDP Growth Slows Down to 4.9% in Q3



China's GDP Growth Slows Down to 4.9% in Q3
China’s Flag

China’s GDP Growth Slows Down to 4.9% in Q3

China’s economic growth moderated in the third quarter of 2023, with gross domestic growth (GDP) coming at 4.9% year over year, a slowdown from the 6.3% increase recorded in the previous quarter, according to the National Bureau of Statistics on Wednesday.

Economists polled by Reuters had predicted GDP to grow 4.4%. On a quarterly basis, China’s GDP rose 1.3%, an improvement from the revised 0.5% growth in the first eight months of the year. The government expects full-year GDP in 2023 to grow “around 5%.”

“A succession of targeted stimulus measures since August is gaining traction, especially in manufacturing and infrastructure investment, driving demand for materials output,” said analysts from Pantheon Macroeconomics.

One key factor contributing to the deceleration is the industrial sector. China’s industrial production increased by 4.5% year-on-year in September, remaining steady compared with the previous month.

However, this growth rate fell short of the pace seen in previous periods. Notably, the mining industry showed signs of strain, registering a mere 1.5% growth, down from 2.3% in August.

The manufacturing sector, a cornerstone of China’s economy, experienced a similar trend. Output in the sector expanded by 5% in September, a slight deceleration from the 5.4% growth recorded in August.

The utilities sector, meanwhile, recorded a sharper pace of increase in added value at 3.5% from 0.2% in August.

While the industrial sector maintained its growth rate in September, the retail sector provided a more robust performance. Retail sales, an indicator of consumption, rose 5.5% year over year in September, reaching 3.98 trillion yuan.

This surpassed market expectations, indicating strong consumer confidence despite the broader economic slowdown.

“Consumption is recovering, albeit unevenly, with people spending more on services than big items like autos. The drumbeat of positive economic news from the official media appears to be lifting consumer sentiment, despite slowing income growth,” said Pantheon.

However, concerns persist over deflation risks. Earlier this month, China reported that consumer prices held steady in September, compared with the previous year, while factory-gate prices fell for the 12th consecutive month.

Fixed-asset investments, a key driver of economic activity, expanded 3.1% year over year in the first nine months of 2023 to 37.5 trillion yuan. Despite this, the pace of expansion slowed compared to the previous period, falling short of economist consensus forecasts.

The liquidity-strained real estate sector, a significant contributor to China’s economic activity, continued to face headwinds. Investments in real estate development fell 9.1% year over year in the first nine months of 2023. This was exacerbated by a slump in commercial housing sales, which dropped by 4.6%.

“The perception of the economy rebounding is likely to buttress private sector confidence, as evidenced by the drop in the household saving rate and green shoots in private business profits and investment,” Pantheon said.

The research firm warned that “China still faces structural headwinds, such local government debt issues, high youth unemployment and access to high-tech chip technology. But these should be weighed against its competitive edge in green energy and electric vehicles, as well as gains made in less advanced chip production and other hard-tech sectors.”

Economists from Macquarie expect China’s GDP growth to slow to 4.7% in 2024 “as policymakers may further lower next year’s growth target from ‘around 5%’ to ‘4.5-5%’ or ‘around 4.5%.’ Since the comparison base will be higher for next year, our forecast implies a modest cyclical recovery in the next 12 months.”

Elsewhere, China’s surveyed urban unemployment rate fell to 5% in September from 5.2% in August. “As the National Bureau of Statistics cast doubt on its own youth unemployment data and stopped releasing that information, we take the improvement of the overall jobless figure lightly,” said analysts from ANZ Research. #China’s GDP Growth Slows Down to 4.9% in Q3 Naira Devaluation Deepens Economic Crisis in Nigeria

Subscribe to our magazine

━ more like this

AFCON 2023 Countdown: Cote d’Ivoire may turn back some Nigerians over travel passports

BY KUNLE SOLAJA. Nigerians holding the ECOWAS Travel Certificates and going for the Africa Cup of Nations next month are certain...

Namibia trainer Benjamin names list of 28 players

Namibia will make its fourth African Cup of Nations appearance Coach Collin Benjamin has called up 28 players The Brave Warriors...

Guinea coach Diawara names 25-man squad for AFCON

Guinea will be making its 13th  African Cup of Nations appearance Coach Kaba Diawara has called up 25 players Syli National...

Mozambique coach Conde announces 23-man squad

Mozambique will make their fifth  African Cup of Nations appearance Coach Chiquinho Condé has called up 23 players The Mambas placed...

Osimhen extends contract with Napoli till 2026

Nigerian international forward Victor Osimhen has signed a contract extension with Napoli until 2026, the Serie A champions announced on Saturday....


Please enter your comment!
Please enter your name here