Walls’ Street: China’s growth defies expectations
Join NBR's Jason Walls as he breaks down the week's macroeconomic news on Walls' Street. With special feature audio.
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The world’s second-largest economy has defied analysts’ expectations, with economic growth increasing ahead of market expectations in China for the second quarter of this year.
GDP growth increased 6.7% compared to the same period last year – a fraction higher than the 6.6% picked by analysts polled by Reuters.
Although the growth rate was just above the worst results since the global financial crisis, economists were upbeat about the result.
After last month’s Brexit, there were fears the impact on China's growth would be more severe than the figure released by the statistics bureau last week suggest.
But officials have indicated the economy still faces downward pressures this year.
Analysts expect more support measures in the coming months as private investment falters, forcing the government to borrow more money.
Meanwhile, China’s central bank has revealed the country has enough fiscal headroom to increase its deficit ratio to between 4-5% of GDP to boost the economy – up from its current target of 3%.
But economists remain concerned China is becoming even more dependent on government spending and debt.
Figures released this week also show bank lending in China hit a record high and government spending jumped 20% in June.
At the same time, growth in investment by private firms fell to a record low in the first half of the year, as businesses retrenched in the face of the sluggish economic outlook and weak exports.
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Thu, 21 Jul 2016
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Walls’ Street: China’s growth defies expectations
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