China's economy fell short of its forecast in the second quarter, slowing down from the previous quarter's 5.3% growth. The economy grew by 4.7% in Q2 2024, falling short of the 5.1% forecast.

A prolonged property slump and job insecurity weakened domestic demand, with retail sales growth touching an 18-month low owing to deflationary pressures.

New home prices dropped at the fastest rate in nine years, eroding consumer confidence and limiting local governments' ability to generate funds.

Despite increased infrastructure investment and funds for high-tech manufacturing, China's yuan and stocks fell following the disappointing data.

The government targets 5.0% growth for 2024, but analysts believe more stimulus may be needed.

Industrial output has outpaced domestic consumption, raising deflationary risks and increasing local government debt. Trade tensions further threaten economic stability despite solid export performance.

In Q3, analysts predict a cut of 10 basis points in the one-year loan prime rate and a reduction of 25 basis points in the banks' reserve requirement ratio.

Additional property-supporting measures are anticipated after the Politburo meeting in late July, including a 300 billion yuan relending loan facility for affordable housing.