China Q2 GDP cheers market participants, industrial production falls in June

China’s gross domestic product (GDP) for the second quarter of this year cheered market participants while industrial production fell during the month of June. Underlying growth seems to be weakening after a strong development last year, as the drop in IP growth is showing signs of.

According to National Bureau of Statistics (NBS), Chinese GDP rose by 1.8 percent q/q in Q2, while the y/y growth rate fell by 0.1 percentage point to 6.7 percent y/y from Q1 to Q2.

Further, industrial production rose by 6.0 percentage y/y in June, while consensus had expected an increase of 6.5 percent y/y. Growth has slowed by 1 percentage point from April to June. The slowdown was broad based with a fall in the y/y growth rates for electricity, steel and glass, cement and iron ore.

In addition, retail sales rose by 9.0 percent y/y in June, up from 8.5 percent in May and higher than consensus’ expectations of an increase of 8.8 percent. Adjusted for price changes sales rose by 7.0 percent y/y, up by 0.2 percentage point from May.