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Chinese Economy Slows to 4.9% Growth in July-September Quarter

10/17/2023

The economic growth of China decelerated to 4.9% for the year during the July-September period, a drop from the 6.3% recorded in the preceding quarter, as reported by the National Bureau of Statistics on Wednesday.


This outcome exceeded the average market prediction of 4.4%, derived from a survey of economists conducted by Nikkei. It appears that the world's second-largest economy is gaining a somewhat more solid footing after policy measures taken by government authorities.


The release of the Gross Domestic Product (GDP) figures coincides with China hosting dignitaries at its Belt and Road Forum, with many onlookers scrutinizing Beijing's strategy for sustaining its foreign infrastructure expansion while grappling with a slowdown in domestic growth.


During the third quarter, China enacted multiple interest rate reductions to stimulate borrowing by both businesses and households and to counter the sluggish economic recovery following the COVID-19 pandemic. One of the measures introduced to invigorate demand in the restrained property sector was the lowering of down-payment thresholds for new home purchases, responding to defaults by certain property developers.


"China's macroeconomic data for the third quarter remained rather weak until September, when a sign of modest stabilization emerged," stated ING Bank.


However, in the absence of a clearly defined growth path, GDP forecasts for 2023 have been fluctuating. Chinese economists have recently made both upward and downward revisions, with estimates hovering near the official target of approximately 5%.

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