By tredu.com • 7/3/2025
Tredu
China’s second-quarter GDP is expected to show year-over-year growth of 5.1%, slightly higher than Q1’s 4.7%, according to early forecasts. On a quarterly basis, however, the growth may have dipped to below 1%, reflecting seasonal moderation and structural challenges.
The official June PMI survey indicated a month-on-month improvement in demand, supporting industrial and production activity during Q2. This reinforces the view that domestic consumption is gradually stabilizing, though still uneven across sectors.
China’s trade sector likely got a boost from front-loaded exports in anticipation of global shipment delays. On the imports side, rising crude oil prices helped elevate the value of inbound trade, supporting broader economic activity.
Consumer Price Index (CPI) inflation returned to positive territory in June, adding to signs of price normalization. However, Producer Price Index (PPI) deflation likely remained steep, with an estimated -3% year-over-year reading, reflecting persistent weakness in upstream manufacturing and commodities.
While headline growth appears solid, structural headwinds—such as a still-weak real estate sector and external uncertainties—mean that policy support may continue into the second half of 2025.
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