China starts to grow again in 2Q20

china-starts-to-grow-again-in-2q20-16072011

China starts to grow again in 2Q20

China reported that the country's GDP grew 3.2% year-on-year in the second quarter of this year, surpassing analysts' expectations compared to the previous year and backing from the contraction of the first quarter. The first quarter growth was affected when the deadlocks to control the coronavirus epidemic in China and Beijing’s incentive measures to support economy were introduced, shrinking 6.8% year-on-year. When we look at the periodic growth rate that will be a more effective data in terms of recovery momentum from the bottom point of the economy, it is seen that there was a growth of 11.5% in the 2Q20 period compared to the previous quarter. We saw that there was a 9.8% periodic contraction in 1Q20.

The early crash in China due to Covid-19 caused the economic contraction to reach its peak in February. As the country that first entered and came out of the crisis, China is currently in a leading position in the economic recovery. PMI data showed how the recovery was mainly fueled by domestic demand. However, as long as external demand is under pressure, it will have a limiting effect on further recovery.

When we look at the more current data; While the industrial production for June increased by 4.8% on an annual basis, an annual contraction of 1.8% occurred on the retail sales side. Contrary to the fact that the factory activity tends to increase, it is observed that the demand side remained below the levels of the previous year. The economy will continue to be supported with public investments and PBOC rate cuts

Source: Tera Menkul
Hibya News Agency