(Yicai) July 9 -- China's economic growth likely eased slightly in the second quarter compared to the first, but it is still on track to hit the full-year target of 5 percent despite ongoing trade tensions with the United States, according to the latest Yicai Chief Economist Survey, which canvassed the opinions of 14 top economists.

China's gross domestic product is anticipated to have expanded 5.07 percent in the second quarter from the year before, down from 5.4 percent growth in the first quarter, according to the poll which was published yesterday. The average forecast for the full year 2025 was 5.02 percent.

In the first half, China's actual GDP is expected to have grown 5.2 percent year-on-year, exceeding the 5 percent annual target, said Lian Ping, president of the Guangkai Chief Industry Research Institute. Taking into account seasonal factors and weakening external demand due to tariff frictions, third-quarter growth may dip below 5 percent, but it will bounce back in the fourth quarter thanks to additional policy support, he added.

The latest Yicai Chief Economist Confidence Index, which is a gauge of sentiment in China’s economy, has dropped back into negative territory to 49.9, from 50.5 last month, according to the same survey. A reading below the benchmark of 50 indicates contraction while that above shows expansion.

The official manufacturing purchasing managers’ index in June continued its upward trend and other trade-related indicators also rose to multi-month highs, said Zhou Xue, an economist at Mizuho Securities Asia. However, credit growth may remain weak due to pressure on local governments to resolve hidden debt.

Looking ahead to the second half, China’s businesses are still in a de-stocking phase, deflationary pressures remain, and economic growth continues to face challenges. Stronger policy support will be needed to meet growth targets, said Lian. 

The growth of retail sales were placed by the economists at 5.66 percent year-on-year in June, lower than the official figure of 6.4 percent for May. And industrial value-added output is expected to expand 5.71 percent, just below May’s 5.8 percent. Fixed asset investment for the first six months was earmarked to rise 3.65 percent, slightly lower than the 3.7 percent growth logged in the first five months.

The economists’ average forecast for June’s consumer price index, a main inflation gauge, was to gain 0.04 percent. This was slightly lower than the 0.1 percent that the National Bureau of Statistics made public for the month today and it reverses the decline of 0.1 percent seen in May. 

The producer price index, which is a key measure of industrial profitability, was tagged by the economists to slump 3.2 percent in June from a year before. This was slightly more optimistic than the official data released today which showed a 3.6 percent drop, a widening of 0.3 percentage point from May.

Exports are likely to jump 4.3 percent in June from the year before, while imports should remain flat, the economists said. By comparison, the official figures for May showed that exports climbed 4.8 percent while imports tumbled 3.4 percent.

As the grace period for reciprocal tariffs comes to an end, US tariffs on global goods will rise again. This will likely weigh on China’s exports in the second half as global demand cools, said Wu Ge, chief economist at Changjiang Securities.

Editors: Dou Shicong, Kim Taylor