China's economy grows 4.5% in third quarter, beating forecasts

Growth topped the 4.4% consensus as retail sales also beat expectations, even after a weak quarter for consumer prices.

China's gross domestic product grew 4.5% year on year in the third quarter, the National Bureau of Statistics said, ahead of the 4.4% consensus forecast.

The reading is faster than the 4.3% growth recorded in the second quarter but still below the 5% pace set in the first quarter. Growth for the first half of 2026 came in at 4.7%. Retail sales for September rose 1.1% year on year, well above the 0.5% forecast, released alongside the GDP figure.

The beat follows a run of support measures Beijing rolled out in late September, including targeted interest-rate cuts and mortgage subsidies, after the cabinet pledged stronger action to meet its annual growth target, Reuters reported. Factory activity also improved that month: the official manufacturing PMI returned to growth after two months of contraction, and a private gauge hit a five-month high, according to Reuters. Analysts polled by Reuters expect the People's Bank of China to leave its loan prime rate and reserve requirement ratio unchanged through the first quarter of 2027.

The third-quarter beat comes despite a softer September reading on consumer prices and a persistent gap between producer and consumer price trends, a divergence that has been flagged as a constraint on further easing. A beat of this size suggests the stimulus already in the pipeline, including the rate cut and mortgage support, is showing up in output even as consumer prices stay weak, a dynamic that will shape how much more policy room Beijing is willing to use given its reluctance to lean on the yuan. The figures also arrive alongside a string of market-opening gestures through October, from expanded crude import quotas to soybean purchases and payments-access talks with US firms, adding to a steadier growth backdrop built up over the month's trade and diplomatic headlines.