Chinese economic outlook worsens as data flurry misses forecasts

A flurry of economic data from China pointed to weakening conditions in the world's second largest economy over the final month of the second quarter.

Official government figures showed that growth in retail sales, industrial production and fixed asset investment slowed down in June, while house price deflation worsened.

The deteriorating outlook was compounded by weaker-than-expected gross domestic product data for the second quarter as a whole, which showed the lowest growth in more than a year.

"Backloaded (and much-needed) fiscal easing will feature more prominently from hereon, but only partially offsetting a more tenuous geopolitical environment for Chinese goods in H2," said Louise Loo, lead economist at Oxford Economics.

"We continue to expect the economy to grow at a modest sub-1.0% sequential pace for the rest of the year, for an annual growth of 4.8% that still undershoots officials' 5% target."

Annual GDP growth slowed to just 4.7% in the second quarter, down from 5.3% in the first. This was below the 5.1% expansion expected by economists and the lowest rate of growth since the first quarter of 2023.

House prices were 4.5% lower than last year in June, worsening from the 3.9% drop in May, registering the 12th consecutive decline and the steepest decrease since June 2015.

Annual retail sales growth slowed to 2.0% from 3.7%, missing the 3.3% estimate, reflecting continued weak domestic demand.

Meanwhile, industrial production growth eased to 5.3% year-on-year from 5.6%, while fixed asset investment growth slipped to 3.9% from 4.0%.