China’s economy grew at a slower-than-forecast 4.7 per cent annual rate in the last quarter, the government said on Monday (July 15). The growth was sharply below the 5.3 per cent annual pace of growth in the first quarter of the year.
According to the economists, the possible reasons behind this could be weak consumer demand and reduced government spending which may be dragging on growth.
The economy grew at a 5 per cent pace in the first half of the year, at the target set by the government for around 5 per cent growth.
The world's second-largest economy grew 4.7 per cent in April-June, official data showed, its slowest since the first quarter of 2023 and missing a 5.1 per cent analyst forecast in a Reuters poll. It also slowed from the previous quarter's 5.3 per cent expansion.
Of particular concern was the consumer sector, with retail sales growth grinding to an 18-month low as deflationary pressures forced businesses to slash prices on everything from cars to food to clothes.
The government is aiming for economic growth of around 5.0% for 2024, a target that many analysts believe is ambitious and may require more stimulus.
United Nations' projections for India
The United Nations, in May this year, revised upwards India’s growth projections for 2024, with the country’s economy now forecast to expand by close to 7 per cent this year, mainly driven by strong public investment and resilient private consumption.
The World Economic Situation and Prospects as of mid-2024, released on May 16, said, “India’s economy is forecast to expand by 6.9% in 2024 and 6.6% in 2025, mainly driven by strong public investment and resilient private consumption. Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly.”
The 6.9% economic growth projections for India in the mid-year update is an upward revision from the 6.2% GDP forecast made by the U.N. in January this year. The U.N. World Economic Situation and Prospects (WESP) 2024 report that was launched in January had said that growth in India was projected to reach 6.2% in 2024, amid robust domestic demand and strong growth in the manufacturing and services sectors. The projection in January for India’s GDP growth for 2025 remains unchanged at 6.6% in the latest assessment of the economic situation.
(With inputs from agencies)
