Will China hit its mid-year growth target?

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China will release its GDP figures for the first half of the year on Tuesday, shedding light on the impact of the ongoing trade war with the US on its economy.

Despite trade tensions and deflationary pressures, China is expected to report strong growth. Economists predict a 5.3% growth in the first six months of 2025, aligning with the government’s target of around 5% for the year.

Deutsche Bank noted that the current growth is partly driven by accelerated activities due to tariff concerns, which have led to a surge in exports. However, experts believe that China may fall short of achieving 5% growth for the entire year, with a median bank forecast of 4.6%.

Recent data also indicates that China is still grappling with deflationary challenges, despite discussions around potential supply side reforms. Consumer confidence remains low, following setbacks from a property market crash and pandemic restrictions in 2022.

Will June inflation data impact the Fed’s decisions?

The US anticipates a rise in inflation for June, which could influence the Federal Reserve’s stance on interest rates later this year.

The Bureau of Labor Statistics is expected to announce a 2.6% increase in the consumer price index for June compared to last year, potentially reducing the likelihood of rate cuts by the Fed. The core rate, excluding food and energy, is also projected to show a rise, prompting speculation on future rate adjustments.

Analysts suggest that the impact of Trump’s tariffs on inflation will become evident in the June data, potentially influencing the Fed’s policy decisions. The outlook may vary based on the inflation report and tariff pass-through effects.

Is UK facing rising inflation?

Investors await the UK inflation data for June to gauge the trajectory of interest rates ahead of the Bank of England’s policy decision.

Economists predict a 3.5% annual inflation rate for June, surpassing the BoE’s 2% target. Concerns arise from escalating food prices, potentially impacting overall inflation and policy decisions.

Despite inflation concerns, the UK economy has shown signs of contraction in recent months, raising questions about job market stability and wage pressures. Analysts anticipate a slowdown in wage growth and a decline in payroll employees, reflecting economic challenges.

Experts are monitoring the labor market conditions and temporary inflation spikes, emphasizing the need for caution in policy decisions amidst economic uncertainties.