China’s economic growth has slowed down in the second quarter to its weakest pace since the early 1990s, as per the official figures released on Monday.
Gross domestic product (GDP) of the country has risen to 6.2. percent in the April-June period from a year earlier, below the 6.4 percent expansion in the first quarter and matching economists estimates.
However, in June, factory output has risen by 6.3 percent, retail sales raised by 9.8 percent, while investment gained 5.8 percent in the first half of the year.
The slowdown adds to the pressure Chinese policy maker’s face as they attempt to negotiate a deal with the US while balancing the objective of job creation with the need to defuse financial risks at home. Although Chinese negotiators are talking with their US counterparts again, there is no certainty that a deal will be reached.
“We expect Beijing to ramp up stimulus measures in the second half despite more limited policy room, though markets should not put too high expectations on the scale and duration of these stimulus measures,” said Nomura International economists led by Lu Ting wrote in a recent research note. Domestic policies will to a large extent be dependent on the US-China trade tensions.
(With inputs from Reuters)