By Kevin Yao
BEIJING, Oct 15 (Reuters) – China’s economic growth likely accelerated modestly in the third quarter from a more than three-year low, supported by fresh policy easing, though the pickup may be barely enough to meet the lower end of Beijing’s full-year growth target.
The world’s second-largest economy is grappling with deepening imbalances, as AI-fuelled exports and strong factory output mask weak consumption and private investment amid a prolonged property slump.
Gross domestic product is forecast to have grown 4.4% year-on-year in July-September, according to a Reuters poll of 50 economists, up from 4.3% in the second quarter but down from the 4.6% expansion forecast in a July Reuters poll.
The projected pace would also remain below the lower end of the official 4.5%-5% growth target.
In late September, Beijing rolled out a fresh round of support measures, including targeted interest-rate cuts and mortgage subsidies, after the cabinet pledged stronger action to shore up growth and meet its annual target.
Earlier this month, authorities also allocated 550 billion yuan ($82.17 billion) in unused government debt quotas to help ease local government financial strains and support infrastructure spending.
“The prospect of a second consecutive quarter of growth below 4.5% year-on-year has increased pressure on policymakers to achieve the full-year growth target of 4.5–5.0%,” analysts at Goldman Sachs said in a note. “While these measures should help the government reach its full-year growth target, local government financing constraints and weak investment incentives could continue to weigh on policy implementation.”
Data released on Wednesday showed China’s trade surplus widened more than expected in September as exports surged, keeping the country on track to surpass last year’s record surplus of $1.2 trillion and likely intensifying trade tensions with major partners.
The government is due to release third-quarter GDP data and September retail sales, industrial production and investment data at 0200 GMT on October 19.
GDP growth is projected to edge up to 4.5% in the fourth quarter, according to the poll.
For 2026 as a whole, China’s GDP growth is forecast to cool to 4.5% from 5.0% last year, before easing further to 4.4% in 2027, according to the poll.
On a quarterly basis, the economy is forecast to have expanded 1.1% in the third quarter, quickening from the 0.9% pace in April-June, the poll showed.
DOWNWARD PRESSURES
China’s exports, a key driver of growth this year, face mounting headwinds as cooling AI-related investment threatens demand for technology products and components. At the same time, a deal with the European Union to rein in Chinese hybrid-vehicle shipments could weigh on the booming auto trade, analysts said.
China is likely to rely more on fiscal stimulus to spur growth, as faster producer-price gains and a pickup in consumer inflation leave the central bank with limited room for high-profile monetary easing.
Analysts polled by Reuters expect the central bank to keep its benchmark lending rates, the loan prime rates (LPRs), and banks’ reserve requirement ratio unchanged through the first quarter of 2027.
The same poll forecast China’s consumer inflation at 1.0% this year, below the government’s target of around 2%, before rising slightly to 1.1% in 2027.
An expected Politburo meeting and the annual Central Economic Work Conference in December could offer fresh clues on Beijing’s policy priorities for next year.
“China should have little difficulty achieving its 4.5-5.0% GDP growth target this year,” Michelle Lam, greater China economist at Societe Generale, said in a note. “The bigger challenge lies in 2027, where GDP growth may ease further to below 4.5%.”
(Other stories from the Reuters global economic poll)
($1 = 6.6931 Chinese yuan renminbi)
(Polling by Susobhan Sarkar in BENGALURU and Jing Wang in SHANGHAI.Reporting by Kevin YaoEditing by Shri Navaratnam)
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