Significant Slowdown in Economic Growth in China in the Third Quarter of the Year

China announced on Monday a significant slowdown in its economic growth in the third quarter of the year due to the impact of the real estate crisis and power outages affecting supply chains. The country's Gross Domestic Product (GDP) recorded a rise of 7.9% in the second quarter of 2021 compared to the same period last year, following a strong recovery in the January to March period, which reached 18.3%. This slowdown was largely anticipated; however, a group of analysts surveyed by Agence France-Presse had expected a lower growth rate of 5%. The growth of the Asian giant's economy did not exceed 0.2% compared to the previous quarter, reflecting a much lower pace than in April to June, when it was 1.3%. The National Bureau of Statistics indicated that "the uncertainty surrounding global conditions is worsening, while domestic recovery remains unstable and uneven." The official figures regarding China's GDP are closely monitored despite skepticism surrounding them, given the country’s weight in the global economy. After emerging from the COVID-19 pandemic crisis that hit late in 2019, China is facing a sharp rise in raw material costs, particularly coal, which it relies on for running its power plants, threatening its economic recovery. Consequently, power generation has slowed despite strong demand, leading to power rationing and increased production costs for companies. Economists also point to the financial troubles facing the giant property group Evergrande, which is threatened with bankruptcy. The real estate sector, one of the engines of the Chinese economy, played a key role in the recovery following the pandemic crisis. The Chinese government has officially set a growth target of no less than 6% for this year. The International Monetary Fund, meanwhile, expects the GDP of the world's second-largest economy to increase by 8%.