HONG KONG — China’s second-quarter gross domestic product growth rate decelerated to 7.6 percent, the country’s National Bureau of Statistics said Friday.
The growth figure, which compares with the 8.1 percent growth registered in the first quarter, signals a sharp slowdown for the world’s second-biggest economy but the number is more or less in line with expectations.
Asian stock markets reacted favorably to the figures. Most indices ended in positive territory — albeit slightly in some cases. Specifically, the Nikkei 225 ended the session up .05 percent while Hong Kong’s Hang Seng gained .35 percent. Singapore’s Straits Times was up .79 percent.
Sheng Laiyun, a spokeswoman for China’s statistics bureau said the government was committed “to the general tone of progressing steadily.” She cited government efforts to manage expectations of inflation and implement a proactive fiscal policy.
On the upside, figures show the year-on-year growth rate of fixed asset investment was higher than expected, rising to 20.4 percent in June compared to 20.1 percent in May.
Overall, economists expect the Chinese economy to recover in the second half of the year.
HSBC economists said there is still downside pressure on China’s growth, but if the Chinese government puts the appropriate monetary and fiscal easing measures in place, the economy should rebound and register 8.5 percent growth in the coming quarters.
Similarly, Nomura bank economist Zhiwi Zhang wrote that the data confirms the bank’s view that GDP growth bottomed in the second quarter and will rebound in the second half of the year.
“We have been stating our belief that the market is overly pessimistic on China’s growth outlook,” the economist wrote in research distributed Friday. “We believe the government is becoming less tolerant of an economic slowdown, as GDP growth is very close to its annual target of 7.5 [percent], and we are approaching the important Communist Party meeting in October where the leadership transition is expected to take place.”
Nonetheless, Nomura cut its full-year 2012 GDP forecast down to 8.2 percent from 8.4 percent and its 2013 GDP forecast down to 7.9 percent from 8.2 percent.
Deutsche Bank chief economist Jun Ma said the bank is 70 percent convinced of a recovery in the second part of the year but it expects the first part of the third quarter to be “sluggish,” due to a combination of factors including weaker purchasing managers indices in June, continued declines in commodity prices and signs that demand for labor is weakening.