China’s big GDP miss in Q2 may be the bad news needed to spur more policy support

CHINA’S economic growth for the second quarter came in at below consensus estimates, prompting some economists to cut again their full-year projection for the world’s second-largest economy, even as the big miss may be the bad news needed to spur more policy support. 

On Friday (Jul 15), the National Bureau of Statistics (NBS) said the economy expanded 0.4 per cent from the year before in the second quarter. This is the lowest rate of growth since the first 3 months of 2020, when China effectively shut down to fight the virus, and its economy shrank for the first time in 28 years.

NBS spokesperson Fu Linghui told reporters that it was not easy to maintain a positive growth: “Looking at the next stage, the risk of stagflation in the global economy is rising.” Stagflation is a mix of slow growth, high unemployment and rising prices.