Economic Overview - In Q2, the actual GDP growth was 5.2% year-on-year, while nominal GDP growth fell to 3.9%, marking a decline of 0.2 and 0.7 percentage points from Q1 respectively[4] - The nominal GDP growth rate has dropped below 4%, the lowest in nearly three years, primarily due to strong supply and weak demand characteristics[23] Supply and Demand Balance - Q3 is expected to see a balance between supply and demand, driven by the implementation of "anti-involution" policies and improved confidence in the real sector[2] - The recovery in consumption is gradually being confirmed, with "anti-involution" policies likely being a key factor influencing Q3 economic performance[4] Investment Trends - Fixed asset investment in Q2 grew by only 1.8% year-on-year, a significant drop of 2.4 percentage points from Q1, with infrastructure and manufacturing investments experiencing widespread contraction[11] - In June, fixed asset investment saw a month-on-month decline of 0.1%, marking a historical low[11] Consumer Behavior - The nominal growth rate of social retail sales in Q2 was 4.5%, slightly down by 0.1 percentage points from Q1, indicating a moderate increase in consumer spending[19] - In June, social retail sales growth fell to 4.8%, a significant drop of 1.6 percentage points from the previous month, with most categories experiencing a broad decline[20] Inflation and Market Dynamics - The report suggests that moderate inflation positively impacts corporate operations and household balance sheets, with expectations of a gradual recovery in nominal GDP growth[2] - The bond market is currently benefiting from a low inflation environment and ample liquidity, although the upward potential for bond prices is limited in the short term[27] Geopolitical and Policy Risks - Risks include geopolitical tensions and the potential for policy changes that exceed expectations, which could impact economic stability[3]