Room remains for stimulus as China's economy slows

Significance

This rate is nevertheless the slowest since the 2008-09 global financial crisis and reflects decelerating domestic growth momentum. A range of policy options is on the table if coming quarters reveal a sharper slowdown.

Impacts

• Higher-frequency indicators are consistent with a distinct slowdown in activity this year.
• Real estate prices have stopped rising, but an appreciable correction is still to come.
• Given a slowing in consumer price inflation, such an adjustment will probably require an outright nominal decline in real estate.
• Downward adjustment in the real estate sector will weigh on spending by both households and firms.