China's missed economic growth forecasts for this year's second quarter is adding to worries over surging youth unemployment and a weak property sector. 

The missed growth will likely raise the odds of the government doubling down on support for the nation's faltering post COVID recovery. 

The world's second largest economy grew at a 6.3 per cent annual pace in the April-June quarter, much slower than the 7 per cent plus growth analysts had forecast given the slow pace of activity the year before.

Unemployment of young people aged 16 to 24 rose to a record 21.3 per cent in June, up from 20.8 per cent the month before.

Investment in property development, sank 7.9 per cent in the first half of the year compared to a year earlier.

The drop is a troubling sign of persisting weakness in an industry that slowed even before the pandemic as the government moved to rein in excessive borrowing.

Officials have acknowledged the economy is facing stiff headwinds, but said they expected growth to still reach the ruling Communist Party's official target for this year of about 5 per cent.

The government will adjust policies to stabilise growth, National Bureau of Statistics spokesman Fu Linghui said at a news conference on Monday.

Quarterly growth, the usual measure for other major economies, was 0.8 per cent, according to government data released on Monday, in line with expectations but down sharply from 2.2 per cent in January-June.

'Worrying result'

Analysts have been far less optimistic than the Chinese government about the outlook for the year, given weakening demand for Chinese exports in other major economies.

The numbers are a "worrying result," said Moody's Analytics economist Harry Murphy Cruise.

"After a sugar injection in the opening months of 2023, the pandemic hangover is plaguing China's recovery."

Government spending is likely to help key industries like real estate and construction, but won't be a "silver bullet," he said in a commentary.

The 6.3 per cent growth in China's gross domestic product from April to June outpaced a 4.5 per cent expansion in the previous quarter.

The still robust growth is largely due to the economy growing just 0.4 per cent a year earlier in April-June of 2022 amid strict lockdowns in Shanghai and other cities during COVID-19 outbreaks.

Apart from more government spending, regulators may cut interest rates and take other measures to free up credit, Marcella Chow, global market strategist at JP Morgan Asset Management wrote in a report.

"The weak economic readings suggest an urgency in escalating policy support so as to stabilise expectations," Ms Chow said.

Early year boost

Earlier this year, growth was boosted as people flocked to shopping centres and restaurants after nearly three years of "zero-COVID" restrictions were removed in late 2022.

The government's growth target of "around 5%" was seen as a conservative goal. It can only be met if the economy maintains close to its current level of growth.

Data released earlier showed exports declined 12.4 per cent in June from a year earlier as global demand faltered after central banks in America and Europe raised interest rates to curb inflation.

Retail sales, an indicator of consumer demand, in June rose 3.1 per cent from the same period in 2022.

That is seen as a strong point, but not strong enough, analysts said.

Industrial output, which measures activity in the manufacturing, mining and utilities sectors, beat analyst's expectations, rising by 4.4 per cent in June compared to the same month a year earlier.

China's policymakers are not having to fight inflation, but may end up having to contend with its opposite, deflation, or falling prices due to weak demand.

In recent months, the authorities have tried to spur lending and spending, with mixed success.

Fixed-asset investment — spending on factory equipment, construction and other infrastructure projects to drive growth — rose by a still tepid 3.8 per cent for the first half of 2023 compared to the same period of 2022.

AP