China Q2 GDP Grows 4.3%, Slowest Since Q4 2022, Missing 4.5% Forecast and Falling Below Beijing's Target

CNBC reported that China's economy in the second quarter expanded at its weakest pace since the fourth quarter of 2022, reinforcing calls for policy stimulus as an accelerating slide in investments deepened the strain on growth.GDP growth came in at 4.3% in the April-to-June period, missing economists' forecast of 4.5% in a Reuters poll and slowing from 5% in the first quarter. The reading fell below Beijing's full-year target range of 4.5% to 5%, the least ambitious goal in decades.Urban fixed-asset investment declined 5.7% in the first six months year-on-year, worse than the expected 4.9% drop. Real estate investment plunged 18%, while infrastructure and manufacturing fell 2.4% and 1.2% respectively.Economist Intelligence Unit senior economist Tianchen Xu expects stimulus measures to be ramped up in the third quarter, including a policy rate cut. He attributed the investment slump to local governments channeling resources into debt restructuring and a shortage of eligible projects.Moody's Analytics economist Sarah Tan said Beijing's campaign to rein in excess capacity and end price wars will also weigh on private investment in the near term.June retail sales grew 1%, rebounding from a 0.6% drop in May and exceeding forecasts for a 0.1% decline. Industrial output expanded 5.3%, beating the 4.7% forecast and accelerating from 4.5% in May.The statistics bureau noted an acute imbalance between excess supply and sluggish demand, urging counter-cyclical adjustments. Tsinghua University professor and former central bank advisor Li Daokui called for substantially expanding government borrowing to more than double this year's planned 12 trillion yuan in new debt issuance.