China: Growth outlook steady with policy support – Standard Chartered

Standard Chartered economists Hunter Chan and Shuang Ding note that China’s Q2 Gross Domestic Product (GDP) growth slowed to 4.3% year-on-year, below the 4.5–5.0% target range, with domestic demand remaining soft. They highlight stronger exports and industrial production versus weak consumption and investment. They expect accelerated fiscal spending on infrastructure and an accommodative monetary stance, while maintaining a 2026 growth forecast of 4.6%.

Growth slows as policy stays accommodative

"China’s Q2 growth fell below the targeted range of 4.5-5.0%, slowing sharply to 4.3% y/y after exceeding expectations at 5% in Q1."

"The imbalance between strong supply and soft domestic demand will likely remain a key challenge in H2."

"We maintain our 2026 growth forecast at 4.6% on the assumption of faster budget implementation in H2."

"The government will likely prioritise implementation of existing policies while developing a contingency plan."

"We expect the government to accelerate fiscal spending on infrastructure before considering additional stimulus, given still-decent fiscal room in H2."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)