China’s Q3 2025 GDP Slows to 4.6% as Policymakers Signal Easing Measures.
China’s economy grew 4.6 percent year-on-year in the third quarter of 2025, slightly below market expectations, according to data released by the National Bureau of Statistics (NBS). The slowdown reflects persistent weakness in exports, subdued household consumption, and ongoing property-sector headwinds. Economists say the government is preparing a new round of policy easing to stabilize growth and restore business confidence before the year’s end.
Economic Growth Slows as Exports and Consumption Weaken
The NBS report showed that China’s industrial output expanded by 4.2 percent in the July–September period, down from 5.1 percent in Q2. Retail sales growth also moderated to 3.5 percent, suggesting that consumer recovery remains patchy despite targeted support measures such as tax rebates and local consumption vouchers.
Exports, which account for nearly one-fifth of GDP, fell 2.3 percent year-on-year in September amid soft global demand. Economists attribute the contraction to slower orders from Europe and the U.S., as well as weaker electronics shipments. Meanwhile, youth unemployment remains high, weighing on household confidence and discretionary spending.
The services sector, traditionally a key growth driver expanded by 4.9 percent, supported by tourism and entertainment spending during the summer holiday season, but analysts caution that momentum may not be sustained through winter.
Policy Easing and Fiscal Support Expected
Analysts believe Beijing will accelerate fiscal stimulus and monetary easing in Q4 to meet its full-year growth target of “around 5 percent.”
The People’s Bank of China (PBoC) is expected to lower the medium-term lending facility (MLF) rate and inject liquidity through targeted credit programs for small and medium-sized enterprises.
On the fiscal side, the Ministry of Finance has signaled plans to issue an additional 1 trillion yuan in special sovereign bonds for infrastructure investment. These funds will primarily target transportation, green energy, and smart city projects.
IMF economists say China’s challenge lies in balancing short-term stimulus with long-term structural reforms. “Policy measures should focus on restoring consumer confidence and improving private sector access to financing,” said IMF China mission head Thomas Helbling.
Market Reaction and Outlook for 2026
Financial markets reacted modestly to the GDP data, with the Shanghai Composite Index closing slightly higher on expectations of new policy easing. The yuan remained stable near 7.28 per dollar after the central bank reaffirmed its commitment to maintaining exchange rate stability.
Economists at Nomura and UBS project full-year GDP growth between 4.7 and 4.8 percent, assuming that stimulus measures take effect in Q4.
However, they warn that global economic uncertainty, combined with slower real estate recovery, may continue to constrain growth into early 2026.
China’s policymakers are expected to announce a new package of fiscal measures during the December Central Economic Work Conference, setting the tone for next year’s development priorities.
