China's Q3 economic growth slows down, misses government's 5% target
China's economy has grown at its slowest pace since early 2023, latest data from the National Bureau of Statistics showed. The gross domestic product (GDP) grew by just 4.6% in Q3, missing the government's target of "around 5%" for this year. This is the second consecutive quarter where China's economic growth has failed to meet its target, raising concerns over the country's financial future.
Analysts' take on China's economic situation
Former head of the International Monetary Fund's (IMF) China division, Eswar Prasad, expressed concerns about China's economic situation. He told BBC News that "the government's growth target for this year now appears in serious jeopardy." Prasad suggested a significant stimulus-fueled boost would be needed in Q4 to achieve the set target. However, Harry Murphy Cruise from Moody's Analytics held a more positive outlook.
China's property market continues to struggle
The slump in China's property sector is deepening, with new home prices in September falling at the sharpest pace in almost a decade. Lynn Song, chief economist for greater China at banking giant ING, said "the property market unsurprisingly remains the biggest drag on China's growth." She added "new investment is unlikely to see a substantive recovery until prices stabilize and housing inventories decline...until then property will remain a notable headwind to growth."
China's central bank urges financial institutions to support growth
Amid the economic slowdown, China's central bank has urged banks and other financial institutions to ramp up lending to support growth. Last month, the People's Bank of China (PBOC) announced the country's largest stimulus package since the pandemic. The package included deep cuts to interest and mortgage rates, support for the beleaguered stock market, and programs encouraging banks to lend more to businesses and individuals.
Additional plans to boost China's economic growth
After the announcement of the stimulus package, the Ministry of Finance and other government bodies have unveiled more plans to boost economic growth. The measures are part of a wider effort to combat issues such as a property crisis and weak consumer and business confidence that have been plaguing the world's second-largest economy.
