China’s economy expands 5.2% YoY in Q2 2025 vs. 5.1% expected
China’s economy expanded at an annual rate of 5.2% in the second quarter (Q2) of 2025, compared to a 5.4% growth in the first quarter, the official data published by the National Bureau of Statistics (NBS) showed on Tuesday. Data beat the market forecast of 5.1% in the reported period.
On a quarterly basis, the Chinese Gross Domestic Product (GDP) rate rose 1.1% in Q2 after advancing 1.2% in the previous quarter, above the market consensus of 0.9% print.
China’s annual June Retail Sales increased by 4.8% vs. 5.6% expected and 6.4% prior, while Industrial Production came in at 6.8% vs. 5.6% estimate and May’s 5.8%.
Meanwhile, the Fixed Asset Investment advanced 2.8% year-to-date (YTD) year-over-year (YoY) in June vs 3.7% expected and 3.7% previous.
AUD/USD reaction to China’s data dump
China’s GDP and activity data fail to boost to the Australian Dollar (AUD). At the time of press, the AUD/USD pair was up 0.05% on the day at 0.6550.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
