China's Q2 GDP Growth Rate Hits 7.9%, Base Effect Diminishes (Update)

[Image source=EPA Yonhap News]

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China's economic growth rate for the second quarter failed to enter the 8% range.

The National Bureau of Statistics of China announced on the 15th that the second quarter gross domestic product (GDP) growth rate was preliminarily estimated at 7.9% compared to the same period last year. Bloomberg had predicted that China's second quarter GDP would grow by 8.0% year-on-year. Major Chinese financial institutions had forecasted an 8.9% growth for the second quarter.

The reason the economic growth rate did not reach the 8% range appears to be the sharp rise in international raw material prices. The base effect being halved is also analyzed as a contributing factor. The Chinese economy plunged to minus (-) 6.8% in the first quarter of last year due to the spread of COVID-19. In the second quarter, it recorded 3.2%, successfully achieving a 'V'-shaped rebound. Subsequently, it continued the rebound trend with 4.9% in the third quarter and 6.5% in the fourth quarter.

The problem lies in the second half of the year. Not only will the base effects of the third and fourth quarters be significantly reduced, but if the global economy falls into recession again due to COVID-19 variants, China's economic growth rate could sharply decline.

Chinese Premier Li Keqiang also seemed to express concern about downward economic risks on the 12th, stating his intention to "support the real economy through proactive fiscal policies in the second half of the year."

This content was produced with the assistance of AI translation services.