(Yicai Global) July 15 -- China's gross domestic product expanded 0.4 percent in the second quarter from the same period last year, less than the 0.94 percent clip predicted by an Yicai Global poll of chief economists, as the country’s productivity was severely impacted by a resurgence of Covid-19.

GDP growth for the first six months advanced 2.5 percent year on year to CNY56.2 trillion (USD8.3 trillion), the National Bureau of Statistics said today.

Economic data for the first half shows that China's economy overcame the adverse impact of unexpected factors to show a sustained upward trend, especially in the second quarter when it achieved positive economic growth, Fu Linghui, NBS spokesman and director of the Department of Statistics, said at the press conference.

June’s strong rebound was just enough to drag the economy out of contraction in the second quarter, after a sharp economic downturn in April and May due to the restrictions imposed to combat outbreaks of Covid-19, Wang Jun, director of the China Chief Economist Forum, told Yicai Global.

With strong policy support, the worst should be over and economic growth should pick up significantly in the third quarter, Wang said.

To achieve the annual economic growth target of 5.5 percent, it is imperative that the novel coronavirus is brought under control in the second half, so as to avoid any further significant constraints on economic activity, said Huang Yiping, vice president of the National School of Development at Peking University. The government also needs to introduce strong stimulus policies to restore market confidence and boost expectations.

As uncertainty lingers, should there be more flare-ups in the second half, policies need to focus on safeguarding businesses and the normal lives of people, Huang said. Some subsidies to the public could also be considered.

June Rebound

Overall, the data painted a gloomy picture. The added value of industries above a designated size grew 3.4 percent in the first half year-on-year, far below the 4.07 percent growth predicted by the Yicai Global poll, according to NBS data. The second quarter achieved growth of 0.7 percent largely thanks to a 3.9 percent jump in June.

Total retail sales of consumer goods dipped 0.7 percent year-on-year in the six months ended June 30, slightly better than the 0.81 percent decline forecast by the chief economists. Sales plunged 11.1 percent in April when the outbreaks were at their most severe, and the decline narrowed to 6.7 percent in May. June achieved growth of 3.1 percent.

Fixed asset investment expanded 4.2 percent in the second quarter from the same period last year, below the chief economists' estimate of 6.08 percent. June’s growth rate, though, reached 5.6 percent.

Editors: Tang Shihua, Kim Taylor