China's GDP perks up on govt support
CHINA'S economic growth accelerated for the first time in three quarters, after the government sped up spending and freed up more money for loans to counter a property slump.
Gross domestic product rose 7.5 per cent in the April-June period from a year earlier, the statistics bureau said yesterday, compared with the 7.4 per cent median estimate in a Bloomberg News survey of analysts.
Last month's industrial production and first-half fixed-asset investment exceeded projections.
Premier Li Keqiang's government has brought forward railway spending, reduced reserve requirements for some lenders and cut taxes to protect an annual growth goal of about 7.5 per cent, which is under threat from a plunge in property construction and weaker home-price gains.
"The data is quite positive," said Zhu Haibin, chief China economist at JPMorgan Chase in Hong Kong.
"The government will continue to support the key sectors it is supporting now, but will not expand to sectors it is not encouraging."
Industrial production rose 9.2 per cent last month from a year earlier, topping the 9 per cent median estimate of analysts and 8.8 per cent in May. Retail sales increased 12.4 per cent from a year earlier, compared with the 12.5 per cent median estimate.
The world's second-largest economy grew a seasonally adjusted 2 per cent last quarter from the previous period, the statistics bureau said, compared with the 1.8 per cent median estimate of analysts and a revised 1.5 per cent in the first quarter.
That implies 8.2 per cent growth on an annualised basis, up from 6.1 per cent for January to March, according to data compiled by Bloomberg.
"Further monetary policy easing across the board will be needed to reduce the downside risks facing the economy and help the Chinese authorities deliver the 7.5 per cent growth target," Liu Li-gang, ANZ's chief Greater China economist in Hong Kong, said in a report.
High inventories of commodities, including imported iron ore, indicate risks to growth, Dr Liu wrote.