China’s economy experienced growth, but the speed of its recovery slowed lately as the country fought with supply chain disruptions and surging commodity prices.
On Thursday, China’s National Bureau of Statistics said GDP grew 7.8% in the first quarter compared with the year ago.
That growth rate was way much slower than the 18.4% yearly increase registered in the first quarter.
The latest value was also weaker than expected. Analysts predicted that China’s economy would expand 8.2% in the second quarter.
Senior China economist for Capital Economics Julian Evans-Pritchard said that China’s initial recovery was rapid last year; that’s the reason why the country fully recovered.
He told CNN Business that it’s above its pre-virus trend. He added that it is less probable to continue to grow rapidly, so it’s hitting against those limitations.
Recent warning signs
The Chinese economy has been experiencing some troubling symptoms in recent months. Single commodity prices hit factory inflation to the highest levels in a decade, while supply chain interruptions held back factory production.
An NBS spokeswoman, Liu Aihua, spoke at a press conference in Beijing on Thursday. She cited a need to help small and medium-sized businesses grow and handle risks.
In June, industrial output increased by 8.4% from a year prior, lightly easing from overgrowth.
According to Yue Su, principal economist for The Economist Intelligence Unit, domestic demand remains weak.
According to the data released Thursday, in May, retail sales growth slowed to 12.2% in June, down from 12.5%. That’s considered the slowest rate of yearly growth.
Yue added that retail sales hadn’t recovered yet. Unemployment is also a cause for concern. In June, the urban unemployment rate was at 6%. But the amount of jobless young people increased to 15.4% compared with 13.7% four months earlier.
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