China GDP Growth Slows to 4.2% in Q4, Missing Beijing's 5% Target
China's economy posted its weakest quarterly growth in two years as property sector woes and subdued consumer spending weigh on the world's second-largest economy.
Priya Sharma
Emerging Markets Analyst
China's GDP grew 4.2% year-over-year in Q4 2025, below consensus expectations of 4.5% and further from Beijing's official target of "around 5%." For full-year 2025, the economy expanded 4.6%, the slowest pace since the pandemic recovery year of 2020.
The property sector continued to be the primary drag, with real estate investment falling 12.3% in 2025. New home prices in 70 major cities declined for the 18th consecutive month, despite a barrage of stimulus measures from Beijing including lower mortgage rates, reduced down payment requirements, and relaxed purchase restrictions.
Retail sales growth of 4.8% in December missed expectations for 5.5%, highlighting persistent weakness in consumer confidence. Industrial production held up better at 6.1%, supported by strong exports in the electronics and EV sectors.
The PBOC is widely expected to deliver further monetary easing in Q1 2026, with economists forecasting a 10bp cut to the medium-term lending facility rate and a 50bp reduction in the reserve requirement ratio.
The offshore yuan (CNH) weakened 0.3% to 7.35 per dollar on the data, while the Hang Seng index in Hong Kong fell 1.2%. Iron ore futures dropped 2.4% on concerns about construction demand.