BEIJING (Reuters) – China’s economic growth is expected to slow to a near 30-year low of 6.2% this year, a Reuters poll showed on Wednesday, despite a flurry of support measures to spur domestic demand amid a bruising trade war with the United States.
The median forecast was unchanged from the last poll in April.
But a stream of downbeat data in recent months and higher U.S. tariffs have fanned expectations that Beijing will need to roll out more stimulus soon to ward off a sharper slowdown that could stoke job losses.
Second-quarter growth was seen cooling to 6.2% from a year earlier, the same as in the previous poll, from 6.4% in the first quarter. China will post its second-quarter gross domestic product (GDP) on July 15.
Most of the 72 institutions covered in the survey expect growth will remain at 6.2% for the rest of this year, compared with expectations for a tick-up to 6.3% in the previous poll.
Zhang Yiping, senior economist at Merchants Securities in Shenzhen, said he expected the U.S. tariff hike in May on $200 billion of Chinese goods to weigh on growth in the second half.
But Zhang said authorities are likely to stick to more moderate policy easing, rather than resorting to more aggressive measures.
“We expect policy this year would focus more on building a floor to underpin the economy, rather than to boost growth,” he said.
So far, China’s stimulus measures have been more restrained than in past downturns, which analysts attribute to fears of adding to a mountain of debt left over from past credit binges.
But the central bank governor reportedly said last month that there is “tremendous” room to adjust policy if the trade war worsens.
The full-year forecast would be nearing the lower end of the government’s 2019 target range of 6-6.5%, and would mark the weakest pace of growth China has seen in 29 years.
It would also spell a further deceleration from 6.6% in 2018 and 6.8% in 2017.
Growth next year will likely cool further to 6.0%, the poll showed.
Beijing has been relying on a combination of fiscal stimulus and monetary easing to weather the current slowdown, including hundreds of billions of dollars in infrastructure spending and tax cuts for companies.
But the economy has been slow to respond, and investors fear a longer and costlier trade war between the world’s two largest economies could trigger a global recession.
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