Online Reporter
China’s economy likely expanded just above the government’s full-year growth target in the second quarter, easing pressure on Beijing to roll out additional stimulus in the near term.
Official figures due today are expected to show gross domestic product rose 5,1 percent year-on-year in the quarter ended June, according to a Bloomberg survey. While slower than the first quarter, it would still put first-half growth at 5,3 percent, comfortably above Beijing’s annual target of around 5 percent, the survey shows.
The economy got a boost from strong exports, helped by a trade truce with the US in mid-May that lowered tariffs on Chinese goods to around 55 percent from a peak of 145 percent, as well as ongoing fiscal support aimed at shoring up domestic demand. That momentum has many economists expecting Beijing to hold off on further stimulus, at least for now, to preserve policy space in case tensions with Washington flare up again once the temporary deal expires in mid-August.
“We see limited urgency for policymakers to strike the policy soon,” Citigroup economists, including Xiangrong Yu wrote in a note Thursday.
Data released on yesterday showed exports rising 5,8 percent in June, accelerating for the first time since March and beating economists’ expectations.
An upcoming July meeting of the Communist Party’s Politburo, which includes 24 of the country’s most senior officials led by President Xi Jinping, could “further confirm a wait-and-see policy mode, while keeping the door open for incremental small-scale support,” the Citi economists said.
The People’s Bank of China has indicated a less dovish stance on easing. — Bloomberg
