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18 Jul 2023

International Economy

The Chinese economy grew less than expected in 2Q23; full-year growth for 2023 is expected to reach 5.2 percent YoY (Business Brief No.4010)

คะแนนเฉลี่ย

        China’s economy in 2Q23 saw less-than-expected growth at 6.3 percent YoY amid slowing economic activity in several sectors, and continued pressure from the troubled property sector. Nevertheless, the Chinese economy in 1H23 grew by 5.5 percent YoY, mainly driven by the service sector. In 1H23, the country’s service sector and infrastructure investment recorded growth of 6.4 percent YoY and 7.2 percent YoY, respectively. Meanwhile, investment in the high-tech industry rose to 12 percent YoY.

        The 2H23 Chinese economy, excluding the low base effect, is likely to grow at a slower pace compared to 1H23. The country’s economic growth still faces challenges, including the risk of  deflation, the uncertainties and limitations of its fiscal and monetary policies, as well as geopolitical tensions. KResearch projects that the Chinese economy in 2023 will expand by 5.2 percent YoY, relatively close to the government’s target of 5 percent. In our view, China will need to impose additional economic stimulus measures, especially policies aimed at restoring confidence among consumers and businesses, such as further interest rate cuts, reduction of the reserve requirement ratio (RRR) of commercial banks, as well as measures for the ailing property sector. Looking ahead, the direction of China's economic stimulus can be monitored after the Politburo meeting in July 2023.

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International Economy