BEIJING – China’s economic growth in the last quarter probably undershot Beijing’s annual target for 2023 as subdued demand and the property sector weighed on activity, a sign of the recovery’s fragility as the government reportedly mulls more stimulus.

Data due on Wednesday will likely show that gross domestic product expanded 4.5 per cent in the July-to-September period from a year earlier – below the official full-year target of about 5 per cent.

GDP growth from the prior quarter likely picked up slightly. The authorities will also release data on industrial output, retail sales, investment and unemployment.

A growth rate slowing below the government’s annual goal may create a case for policymakers to step up support for the economy.

While stimulus so far has appeared to have some impact – factory activity improved and a drop in exports moderated – consumer prices in September slowed to the brink of deflation and loan growth was weak.

Some economists have been raising their forecasts in recent weeks as they anticipate China just about hitting its growth target for 2023 – although it is not a sure bet and any weakness in the data may suggest a need for President Xi Jinping’s government to do more to support the recovery. 

The authorities are considering raising 2023’s budget deficit by issuing more debt to spend on infrastructure, Bloomberg News reported last week, and are also mulling ways to shore up stock market confidence.

Economists are expecting China to further cut interest rates and banks’ reserve requirement ratio in 2023.

“Since August, we have seen some signs of a stabilisation. But we have to be very cautious,” said Nomura Holdings chief China economist Lu Ting.

If the third-quarter GDP data shows growth of 4.5 per cent, he forecasts that the final three months of the year would have to match that pace for Beijing to hit its target.

The National Bureau of Statistics is expected to release September and third-quarter economic data on Wednesday morning. BLOOMBERG