Falling house prices and a soft labour market will continue to hold back consumer spending over the coming months. And with the PBOC concerned about a bond bubble, large-scale monetary easing appears unlikely. But a ramp up in fiscal spending and continued export strength means the economy may nonetheless regain a bit of momentum during the rest of the year. The medium-term outlook is still challenging, however. Widening trade barriers threaten to eventually weigh on exports. And construction activity still has a long way to fall.
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