China's second-quarter growth beats forecasts but deflation fears fuel calls for stimulus, deeper reform

China’s economy grew at a faster-than-expected rate in the second quarter, keeping the country on track to meet its full-year target of 5% and easing some pressure on policymakers to step up stimulus to underpin growth

China’s economy grew at a faster-than-expected rate in the second quarter, keeping the country on track to meet its full-year target of 5% and easing some pressure on policymakers to step up stimulus to underpin growth.

China’s gross domestic product expanded by 5.2% in the second quarter, according to China’s National Bureau of Statistics on Tuesday. While the growth rate beat Reuters-polled economists’ estimates of a 5.1% growth, it represented a slowdown from the 5.4% in the first quarter.

In June, retail sales growth slowed to 4.8% from a year earlier, compared with the 6.4% year-on-year increase in May. That figure also disappointed Reuters-polled economists’ forecast of 5.4%.

Catering sales, including food and beverages, edged up by just 0.9%, its worst performance since December 2022 when the country grappled with a receding pandemic, according to Wind Information.

Industrial output expanded by 6.8% from a year earlier, versus median estimates of 5.7%.