China's Q2 GDP grew 4.3%, missing the 4.5% forecast and slowing from 5% in Q1. Investment slumped 5.7%, retail sales rebounded 1%, and industrial output beat at 5.3%.
China's economy grew at its weakest pace since 2022 in the second quarter, with gross domestic product expanding 4.3% in the three months through June. The print missed the 4.5% median estimate in a Reuters poll and slowed from 5% in the first quarter, the National Statistics Bureau said Wednesday.
The reading sits below Beijing's full-year growth target range of 4.5% to 5%, the least ambitious goal in decades. The miss adds pressure on policymakers to deliver additional fiscal stimulus at the Politburo meeting later this month, traders said.
Urban fixed-asset investment, which covers real estate and infrastructure, dropped 5.7% in the first half from a year earlier. That was worse than the 4.9% decline expected and steeper than the 4.1% contraction in the first five months. The property sector remains the biggest drag on the economy, with home sales and developer financing still curbed by Beijing's deleveraging campaign.
Retail sales provided a rare bright spot, rising 1% in June from a year ago. That rebounded from a 0.6% drop in May and beat the 0.1% decline economists had forecast. The bounce came after merchants slashed prices. The underlying trend remains weak, analysts said.
Industrial output jumped 5.3% in June, faster than the 4.7% forecast and up from 4.5% in May. The factory sector continues to benefit from strong export demand tied to the global AI investment boom. The gap between export-led production and domestic consumption is widening, the data showed.
The GDP miss sent Chinese stocks lower. The iShares China Large-Cap ETF (FXI) fell 1.2% in early trading. The KraneShares CSI China Internet ETF (KWEB) dropped 1.5%. The yuan weakened past 7.27 per dollar, a level that has drawn intervention from the People's Bank of China in the past. Commodity prices also slipped. Iron ore futures in Dalian fell 2.3%, a move traders linked to the weaker demand outlook.
The data comes ahead of the Politburo meeting later this month. Beijing is expected to review the economy and set the policy agenda for the second half of the year. Traders will watch for signals on fiscal spending and local government debt relief. The unemployment rate held steady at 5% in June, within the government's target of below 5.5% for the next five years.
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