China's economic recovery quickens in Q3 but misses forecasts

Gabriel Crossley and Kevin Yao, Reuters

Posted at Oct 19 2020 10:54 AM | Updated as of Oct 19 2020 10:58 AM

China's economic recovery quickens in Q3 but misses forecasts 1
A clerk of ICBC bank counts Chinese one hundred Yuan Banknotes as she poses for camera during a photo opportunity at its branch in Beijing, China, April 13, 2016. Kim Kyung-Hoon, Reuters/File Photo/File Photo

BEIJING - China stepped up its economic recovery in the third quarter from the coronavirus shock but missed forecasts, pointing to continued challenges for one of the few drivers of global growth this year.

Gross domestic product (GDP) grew 4.9 percent in July-September from a year earlier, the National Bureau of Statistics (NBS) said on Monday, slower than the median 5.2 percent forecast by analysts in a Reuters poll and following 3.2 percent growth in the second quarter.

The world's second-largest economy grew 0.7 percent in the first nine months from a year earlier, NBS said.

Policymakers globally are pinning their hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and a second wave of coronavirus infections.

China has been steadily recovering from decades-low growth seen in the first months of the year caused by the coronavirus shock. But several recent indicators have pointed to a broader upturn in consumption as well in the third quarter.

On a quarter-on-quarter basis, GDP rose 2.7 percent in July-September, the bureau said, compared with expectations for a 3.2 percent rise and an 11.5 percent rise in the previous quarter.

Industrial output grew 6.9 percent in September from a year earlier, after a 5.6% rise in August, while retail sales grew 3.3 percent, versus a 0.5 percent rise in August.

Fixed-asset investment rose 0.8 percent in the first nine months from a year earlier, after dipping 0.3 percent in the first eight months.

The government has rolled out a raft of measures this year, including more fiscal spending, tax relief and cuts in lending rates and banks' reserve requirements to revive the coronavirus-hit economy and support employment.

While the central bank stepped up policy support earlier this year after widespread travel restrictions choked economic activity, it has more recently held off on further easing.

The International Monetary Fund has forecast an expansion of 1.9 percent for China for the full year, the only major economy expected to report growth in 2020. 

Premier Li Keqiang warned earlier in October that China needs to make arduous efforts to achieve its full-year economic goals, citing a complex domestic and foreign environment.