China GDP growth, exceeded expectations in the second quarter

China’s economic growth exceeded expectations in the second quarter but a more pronounced slowdown is becoming likely in the months ahead, made worse by risks to global trade and sluggish consumer demand at home.

Gross domestic product expanded 5.2% in April-June from a year earlier, after a gain of 5.4% in the first quarter, according to data released Tuesday by the National Bureau of Statistics. That compares with a 5.1% median forecast from economists surveyed by Bloomberg.

The world’s second-largest economy has so far held up well in the face of higher tariffs, thanks to front-loading by exporters and resilient shipments to markets outside the US. But deflationary pressures are intensifying, with retail sales growth falling short of forecasts and home prices dropping at a faster pace in June.

Analysts at Morgan Stanley expect GDP growth to slip below 4.5% in the second half of the year due to “payback of front-loading, weaker global trade amid renewed tariff escalation, and continued deflation loop.”

Source: Bloomberg