- China’s GDP expands 7.9% in Q2
- The Central Bank Announced Its Interest Rate Decision: It Will Remain Unchanged at 19 Percent
- According to Powell Economy is Still Far From Targets
China’s GDP expands 7.9% in Q2
In the second quarter of this year, China’s economic growth was 7.9%, slightly lower than market forecasts.
According to the second-quarter GDP figures issued by China’s National Statistics Office, the Chinese economy grew more slowly than projected in the second quarter, as high raw material costs hindered manufacturing operations and new COVID-19 regulations limited consumer spending.
China’s economic growth increased by 7.9% in the second quarter of this year compared to the same time last year, however, predictions were 8.1 percent.
After a record 18.3 percent annual growth in the first quarter, growth fell dramatically in the second quarter, due to the COVID-19 pandemic’s effects. China’s growth was 1.3 percent in the third quarter, slightly higher than the 1.2 percent forecast.
Industrial output and retail sales both exceeded expectations. China’s industrial production, on the other hand, dropped from its 8.8% gain in May, rising 8.3% in June compared to the same month the previous year, above expectations of 7.8%.
When compared to the same month the previous year, retail sales in the country climbed by 12.1% in June. Following a 12.4 percent growth in May, the market expected an increase of 11%.
“China’s economic recovery is brisk and very healthy, as although the government has put a lot of resources on stimulating the economy, it is also making sure that economic development is balanced, able to be sustained, and there wasn’t a flood of liquidity,” Hu Qimu, the chief research fellow at the Sinosteel Economic Research Institute, told the Global Times.
The Central Bank of Turkey Announced Its Interest Rate Decision
The Central Bank of Turkey made its interest rate decision: it will remain unchanged at 19 percent.
The one-week repo auction rate was kept at 19 percent by the Central Bank. According to the Central Bank’s statement, the policy rate will remain above inflation while maintaining a substantial disinflationary effect until strong evidence pointing to a permanent reduction in inflation appear and the medium-term 5 percent target is met.
The Monetary Policy Committee (PPK) of the Central Bank gathered to discuss the policy rate.
The Central Bank, which has maintained interest rates unchanged at 19 percent for the previous four meetings, did so once more.
According to the Central Bank’s interest rate statement, “The current tight monetary policy stance will be firmly maintained until the April Inflation Report prediction path is significantly reduced. As a result, the Committee has decided to maintain the policy rate at its current level.”
The following statements were also included in the declaration:
‘’The acceleration of vaccination around the world, particularly in industrialized countries, aids the global economy’s recovery. In addition, by reducing constraints, economies that have achieved headway in immunization programs find more success in economic activity. Until strong indicators pointing to a permanent decline in inflation occur and the medium-term 5 percent target is reached, the policy rate will continue to be set at a level above inflation, maintaining the strong disinflationary effect’’
According to Powell Economy is Still Far From Targets
With the help of supporting monetary and fiscal policy and also with the vaccination Powell stated that normalization of the economy and solid economic growth is in view.
However, given the fact that labor market conditions are improving, Powell highlighted that there is still a long way to go.
“Inflation has increased significantly and will likely remain high in the coming months before it moderates,” Powell said.
According to Powell, they are continuing to examine the vulnerabilities in the financial system in order to achieve maximum employment and price stability in a sustainable manner. Powell stated that the financial system’s core institutions are still strong. He also stated that the Fed’s ultra-low interest rate policy will not be changed anytime soon.
June meeting ensured that monetary policy would continue adequate support to the economy until the recovery was complete. From the statements, it is understood that the target range for the federal funds rate will be maintained until the bank achieves its objectives.
They stated that they will continue to examine the effects of new information on the economy while monitoring the monetary policy stance. On the subject, Powell said that “We will be ready to adjust the monetary policy stance appropriately if we see signs that the course of inflation or long-term inflation expectations have materially and permanently gone beyond the levels consistent with our target. While reaching the standard of ‘significant progress is still a long way off, participants expect progress to continue. We will continue these discussions at upcoming meetings. As we have said before, we will give notice before we announce the decision to make changes to our asset purchases.”