Thursday, July 16, 2015

China stock boom boosted GDP, raising sustainability questions

China's frenzied stock market boom, which soured in the second half of June, helped drive a surge in financial sector growth that underpinned the economy's better- than-expected gross domestic product result.
 
chinatockss.jpgFinancial services surged 17.4 per cent in the first six months from a year earlier, according to China's statistics authority, as exchanges and brokerages registered surging revenue amid record trading volume. It was the stand out industry as real estate languished and agriculture grew at about half the overall economy's pace of 7 per cent.

The data underscores the fragility of China's growth in the quarter, as a rout that wiped almost US$4 trillion in equity values may shake confidence in the sector. That could dent hopes for a pick up in the economy in the second half.

"To the extent that growth was supported by financial sector gains from the stock market, it won't be sustained without further stimulus," Bloomberg economist Tom Orlik wrote in a note after the quarterly GDP release on Wednesday.

No comments:

Post a Comment