China’s economic growth is expected to have slowed to its weakest pace since the global financial crisis in the third quarter of 2018 as the country’s trade war with the U.S. puts pressure on growth.
According to analysts polled by Reuters, China’s GDP growth announcement will likely come in at 6.6 percent in the quarter from July to September compared to a year earlier. That would be the weakest pace since the first quarter of 2009.
Economists in the Reuter’s poll estimated GDP grew 1.6 percent quarter-on-quarter.
Beijing is expected to announce that closely-watched figure at 10 a.m. local time.
Although Beijing’s official GDP figures are tracked as an indicator of the health of the world’s second-largest economy, many outside experts have long expressed skepticism about the veracity of China’s reports.
“It’s very clear that China’s economy is on a very soft footing at this moment and in the meantime, we do see there are a lot of bearish sentiments towards China’s economic outlook, as well as the financial market outlook,” said Hao Zhou, senior emerging market economist for Asia at Commerzbank. His third-quarter GDP growth forecast for China was 6.6 percent.
For its second quarter, China announced earlier this year that it had posted GDP growth of 6.7 percent from a year ago, slightly lower than 6.8 percent in the first quarter of 2018 as Beijing cracked down on risky credit amid the escalating trade tensions.
Indeed, financial deleveraging has slowed this year versus the last two years, Zhou told CNBC’s “The Rundown.”
However, the People’s Bank of China has already cut banks’ reserve requirements four times this year. Those moves have been described as an attempt to prop up liquidity and growth amid the trade dispute with Washington.
China has sought to implement relatively tight monetary policy to force financial deleveraging and cut debt. However, easier monetary conditions — achieved through means like cutting banks’ reserve requirements — are seen as a tool to support growth.
China’s official growth target this year is around 6.5 percent.
Beijing, Zhou predicted, will keep growth stable, but there will be some “struggling” in the process.
— Reuters contributed to this report.