China’s economy likely grew at the slowest pace in a year in the third quarter, hurt by power shortages, supply bottlenecks and sporadic COVID-19 outbreaks and raising heat on policymakers amid rising jitters over the property sector.
Data released on Monday is expected to show gross domestic
product (GDP) grew 5.2 percent in July-September from a earlier – the
weakest pace since the third quarter of 2020 – weakening from
7.9 percent in the second quarter, a Reuters poll showed.
That would mark a further deceleration from 18.3 percent expansion
in the first quarter, when the year-on-year growth rate was
heavily flattered by the very low comparison seen during the
COVID-induced slump of early 2020.
On a quarterly basis, growth is forecast to ease to 0.5 percent in
July-September from 1.3 percent in the second quarter, the poll showed.
The world’s second-largest economy has rebounded from the
pandemic but the recovery is losing steam, weighed by faltering
factory activity, persistently soft consumption and a slowing
property sector as policy curbs bite.
“The potentially faster-than-expected economic slowdown,
driven by energy shortage and the contagion effect owing to a
potential Evergrande default, will require further easing of
monetary policy,” Citi economists said in a note.
Global worries about a possible spillover of credit risk
from China’s property sector into the broader economy have also
intensified as major developer China Evergrande Group
wrestles with more than $300 billion of debt.
READ MORE: Why India and China face worsening energy crunch
Chinese leaders, fearful that a persistent property bubble
could undermine the country’s long-term ascent, are likely
to maintain tough curbs on the sector even as the economy slows,
but could soften some tactics as needed, policy sources and
analysts said.
Premier Li Keqiang said on Thursday that China has ample
tools to cope with economic challenges despite slowing growth,
and the government is confident of achieving full-year
development goals.
Analysts polled by Reuters expected the PBOC to keep banks’
reserve requirement ratio (RRR) unchanged in the fourth quarter,
before delivering another 50-basis points cut in the first
quarter of 2022.
China releases third-quarter GDP data on Monday (0200 GMT),
along with September factory output, retail sales and
fixed-asset investment.
September industrial output is expected to rise 4.5 percent from a
year earlier – the lowest since May 2020. Retail sales growth is
expected to pick up to 3.3 percent from 2.5 percent in August.
READ MORE: How the Chinese Evergrande crisis affects global markets
Source: TRTWorld and agencies
China’s economy sees slowdown as pressure mounts on policymakers
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