China’s economy grew at its slowest pace since early last year, struggling to recover from recent challenges. In the third quarter, the country’s gross domestic product (GDP) increased by 4.6% compared to the same period last year, according to the National Bureau of Statistics. This growth is lower than the previous quarter and below the government’s target of around 5% for this year.
Despite this, the growth figure was slightly better than what analysts had predicted. Other reports released recently, including data on retail sales and factory output, also showed better-than-expected results.
To boost the economy, Beijing has introduced several measures in recent weeks. However, this marks the second consecutive quarter that growth has fallen below the 5% target, raising concerns among government officials.
Eswar Prasad, a former head at the International Monetary Fund (IMF), stated, “The government’s growth target for this year is now at serious risk.” He emphasized that a significant stimulus is needed in the fourth quarter to meet the target.
On a more positive note, economist Harry Murphy Cruise from Moody’s Analytics believes that the recent stimulus measures may help the economy reach the 5% target this year, but more action is needed to tackle ongoing challenges.
Additionally, new home prices in China dropped in September at the fastest rate in nearly ten years, indicating that the property market is still struggling. Lynn Song, chief economist at ING, said, “The property market is still the biggest obstacle to China’s growth.” She noted that new investments won’t recover significantly until home prices stabilize and inventory decreases.
Recently, China’s central bank called on financial institutions to increase lending to support economic growth. Last month, the People’s Bank of China (PBOC) announced a major stimulus package, which included significant cuts to interest and mortgage rates, along with efforts to support the stock market and encourage banks to lend more.
China, the world’s second-largest economy, faces multiple challenges, including a property crisis and low consumer and business confidence.