China – Q3 GDP slowed on weak domestic demand
GDP growth eased to 4.8% yoy in Q3 but it would still put China’s economy on track to meet the 5% official target.
Commerzbank Economic Research
10/20/2025
Growth has been uneven
Key takeaways: While China’s Q3 GDP expanded 4.8% yoy, beating our expectation, it disguised the underlying weakness in domestic demand. Admittedly, GDP in the first three quarters grew 5.2% yoy and this puts China’s economy on track to meet the official 5% target goal. However, growth was mainly supported by strong exports. Household consumption growth slowed and fixed investment contracted.
In nominal terms, GDP growth slowed to just 3.7% yoy, much lower than the real growth figure as China experienced the 10th consecutive quarter of deflation, according to our estimated GDP deflator. This also highlights the continued weakness in domestic demand and the impact of “involution” (excessive and destructive, race-to-the-bottom competition).
Details: According to the household survey data, consumption per capita grew 3.4% yoy in Q3, down from 5.2% in Q1 and Q2. Monthly retail sales data also showed a similar slowdown in Q3 compared to Q2, and in September it registered just 3% yoy growth.
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