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🇵🇱 Poland /Economy & Trade

China’s Economy Is Slowing, but Its Growth Target Should Still Be Met

From Rzeczpospolita · () Polish

Translated from Polish and summarized by DistantNews. Read the original for the full story.

At a glance

Analysis Named sources Context piece
  • China’s economic growth slowed to 4.3% in the second quarter from 5% in the first, while analysts estimate that oil demand fell sharply year on year.
  • Lower fuel production and weaker activity indicators point to a broader slowdown, although exports linked to artificial-intelligence demand remain strong.
  • Higher fiscal spending later in the year could support growth in the third and fourth quarters if local governments use their budgets effectively.

China’s weakening appetite for fuel is becoming one of the clearest signs that its economy has lost momentum. Analysts estimate that Chinese oil demand fell 12% year on year in the second quarter, based on refinery output and imports of petroleum products, since official consumption data are not available.

The estimate may overstate the decline. Iranian product imports may have exceeded official figures, smaller refineries may have sold more fuel than reported, and oil from reserves also reached the market. Various sources suggest that several tens of millions to as many as 100 million to 150 million barrels have been released from reserves since May, mainly from commercial stocks.

China’s annual growth of about 3.2% in the second quarter was more than 1 percentage point weaker than official data suggest.

· Capital Economics expertsThe analysts’ estimate contrasts with China’s official growth figure.

Official figures show gasoline production fell 9.9% year on year in the second quarter, to 3.12 million barrels per day. Diesel production dropped 14.2%, to 3.37 million barrels per day. Yet the market showed no shortages, suggesting that demand in the world’s second-largest economy had clearly weakened.

China’s official gross domestic product growth slowed to 4.3% in the second quarter, from 5% in the first three months. Capital Economics’ China Activity Proxy put growth at 3.2%. The firm said exports continued to rise, driven mainly by strong demand related to artificial intelligence, while households appeared to shift spending from goods to services. A substantial increase in fiscal spending during the rest of the year could help revive activity in the third and fourth quarters, provided local authorities use their budgets fully and productively.

Growth remained stable in the face of the war in Iran.

· Capital Economics expertsThe assessment describes China’s performance despite external pressures.
About this summary

Originally published by Rzeczpospolita in Polish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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