China's economy recorded a 6.3% year-on-year expansion in the second quarter, largely driven by a low base effect resulting from the Covid-19 pandemic's severe impact in the same period last year. However, growth momentum has noticeably slowed down compared to the strong rebound experienced in the first quarter. Data from the National Bureau of Statistics reveals that GDP only grew by 0.8% from April to June.
The first quarter of this year witnessed a robust recovery as pandemic restrictions were lifted, with GDP growth reaching 4.5%. Nevertheless, recent economic indicators indicate a fading momentum. The latest data demonstrates a significant deceleration in growth.
Retail sales in June increased by 3.1%, marking the slowest growth since December when most pandemic-related restrictions were lifted. Industrial output expanded by 4.4% in the same month, while fixed asset investments saw a rise of 3.8%.
One concerning aspect is the record-high youth unemployment rate, particularly for individuals aged 16 to 24, which reached 21.3% in June. This figure surpassed the previous record of 20.8% set in May, indicating ongoing challenges in the labour market for young people.
The overall picture suggests that China's economic recovery has lost some momentum. Slower retail sales growth and industrial output, along with tepid fixed asset investments, indicate a potential deceleration in domestic consumption and investment activities. The persistently high youth unemployment rate further underscores the challenges in the job market, particularly for young individuals.
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