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China’s official GDP growth dropped marginally in Q2 to 6.7% yoy, versus 6.8% yoy in the preceding three quarters, remaining above the 6.5% target for 2018, notes Arjen van Dijkhuizen, Sr. Economist at ABN AMRO.

Key Quotes

“The slowdown reflects the impact of the financial deleveraging campaign – with for instance a crackdown on shadow banking – and a slowdown in infrastructure spending. The growth contribution of consumption rose further to 78.5% in 1H2018, illustrating the ongoing rebalancing.”

“Given the lack of volatility in official growth, we look to alternative indicators including Bloomberg’s monthly GDP tracker.”

“We expect China’s gradual slowdown to continue in the coming quarters, with external risks rising as tensions with the US escalate.”