China GDP growth beats expectations
By Abigail Townsend
Date: Wednesday 18 Oct 2023
(Sharecast News) - China's economy grew by nearly 5% in the third quarter, official data showed on Wednesday, beating market expectations.
According to the National Bureau of Statistics, GDP rose by 4.9% year-on-year, after increasing 6.3% in the previous quarter. Most economists had been expecting 4.5%.
On a quarterly basis, the economy expanded 1.3% compared to a downwardly-revised 0.5% in the second quarter. That was also ahead of forecasts, for 0.9%.
Industrial production rose by 4.5% year-on-year while retail sales strengthened 5.5%. Consensus had been for a 4.4% and 4.9% rise respectively.
Fixed asset investment increased by 3.1% in the year to date in September, however, marginally below forecasts for 3.2%.
The NBS also struck a cautious note looking forward, noting: "We should be aware that the external environment is becoming more complex and grave while the domestic demand remains insufficient and the foundation for economy recovery and growth needs to be further consolidated."
Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: "A succession of targeted stimulus measures since August is gaining traction, especially in manufacturing and infrastructure investment, driving demand for materials output.
"Consumption is recovering, albeit unevenly, with people spending more on services than big items like autos.
"China has probably done enough to ensure official GDP growth hits the 'about 5%' target for 2023, despite the feeble property sector, falling exports and people's worries about their income prospects."
Louise Loo, China economist at Oxford Economics, said: "A stimulus-led cyclical pickup in China [is] underway. Retail sales in particular was a strong beat, as spending in festivities-related segments - tobacco and alcohol, entertainment, clothing and catering - accelerated ahead of the extended Golden Week holiday.
"But property indicators remained very weak in September, with no signs of bottoming out. Such is the divergence between the relatively decent macro data versus weak sentiment in the sector that is challenging to envision that growth momentum would see a further sequential acceleration in the fourth quarter in the absence of meaningful stimulus."
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