China on path to meet annual economic growth target in 2026

By Burhan Sansarlioglu and Emir Yildirim

ISTANBUL (AA) - China’s better-than-expected growth has eased expectations for broad stimulus measures and fueled optimism that Beijing’s annual growth target will be met this year.

The Chinese economy grew 1.2% on a quarterly basis and 4.5% year-on-year in the third quarter, exceeding expectations, following growth of 5% in the first quarter and 4.3% in the second.

China’s economic growth for the first nine months of the year reached 4.6%, aligning with Beijing’s target range of 4.5-5% for this year.

Last year, China’s gross domestic product (GDP) grew 4.5% in the fourth quarter, while the economy expanded 5% for the year as a whole, prompting Beijing to revise down its 5% target for the previous three years to a range of 4.5-5%.

Arjen van Dijkhuizen, a senior economist at ABN AMRO, told Anadolu that the bank maintains its growth forecast at 4.6% for this year and 4.5% for next year.

“This would imply that annual GDP growth would still come in at the lower end of Beijing’s growth target range (4.5-5.0%) for this year,” he said.

He attributed the Chinese economy’s growth to strong exports led by the artificial intelligence (AI) and tech sectors, saying export strength offset the negative impact on growth from the Middle East conflict and continued weak domestic demand.

“Our forecasts are partly based on the fact that the authorities are adding some targeted support, while refraining from large-scale macro stimulus,” he noted.

Dijkhuizen said recently released Purchasing Managers’ Index (PMI) data showed a slight recovery in economic growth during the summer months.

“In line with strong annual export/import growth for September published data last week (on the back of the ongoing global tech/AI boom), industrial production accelerated further, to 5.5% y/y (consensus: 5.5%, August: 5.2%) and 0.6% m/m (August: 0.5%). Retail sales growth came in stronger than expected at 1.1% y/y (consensus: 0.5%, August: 0.4%) and 0.4% m/m (August: -0.2%),” he added.

Burhan Sansarlıoğlu