Analysts at Standard Chartered Bank expect China's economy to pick up in the second half of the year on the back of lower interest rates and increased spending on infrastructure.
'The economy will not come roaring back, but it will at the very least stabilise and should regain a little bit of momentum,' the bank says.
The National Bureau of Statistics said the gross domestic product expanded 7.6 per cent in the second quarter from a year ago, the weakest quarterly performance in three years, and 1.8 per cent quarter-on-quarter.
'Actually, according to indicators like electricity production, diesel throughput and feedback from clients, the quarter was probably even weaker, we guess, nearer 7 per cent rather than 8 per cent,' senior economist Kelvin Lau said yesterday.
'However, as measures to protect the downside have been implemented, with lower interest rates and more infrastructure spending, we expect a mild recovery in the third quarter.'
According to Lau, there are signs growth stabilised in June, led by growth in fixed-asset investment, which accelerated to 21 per cent from 20 per cent in May.
'Growth in production of cement and steel products accelerated in June,' Lau said. 'Both look like they may be bottoming out in year-on-year terms,' he added, because 'investment from the state budget and bank loans continued to improve in June'.