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China GDP growth slumps to lowest in 27 years as the trade war hits

The country's gross domestic product grew by 6.2% in the quarter ended in June, the slowest quarterly growth rate since 1992 and a decrease of 6.4% in the previous quarter, according to government figures released on Monday.

And China's economy will continue to face "downward pressure" in the second half of this year, the country's National Bureau of Statistics said in a statement.

"The Chinese economy is still in a complex and serious situation," he said. "Global growth has slowed and external uncertainties are increasing."

While Beijing and Washington recently agreed to a temporary truce in their trade war that lasted for months, analysts say there are still many questions about whether they can reach an agreement.
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"The uncertainty caused by the trade war between the United States and China was an important factor and we believe that this will persist," said Tom Rafferty, China's chief economist at The Economist Intelligence Unit.

"Companies are skeptical that the two countries reach a broader trade agreement and recognize that trade tensions can rise again," he added.

Analysts expect Beijing to introduce more stimulus measures to boost the economy, including possible interest rate cuts by the country's central bank, the People's Bank of China. The Federal Reserve of the United States has also indicated that it can lower interest rates.

"While the PBOC has already provided encouragement this year, markets are waiting for … additional measures, which will likely occur if trade negotiations collapse." He said Edward Moya, senior market analyst in Oanda. "If the conversations progress constantly, we will still see the [bank] offer new stimuli after the Fed's anticipated rate cut at the end of the month. "

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