(Yicai Global) July 17 -- China's gross domestic product growth fell short of expectations in the second quarter, jumping 6.3 percent because of a low base of comparison a year earlier.

The average predicted by chief economists in China surveyed by Yicai Global was for a 6.97 percent clip in the three months ended June 30. The median forecast was 7 percent. First-quarter GDP growth was 4.5 percent.

As economic policies to boost internal demand and better expectations continue to take effect, the recovery will gain momentum, according to market insiders.

In the first half of the year, China's GDP grew 5.5 percent to about CNY59.3 trillion (USD8.3 trillion), data from the National Bureau of Statistics also showed today.

The economy has shown healthy growth since the start of the second quarter, insiders noted. But with weak internal driving forces, inadequate effective demand, and unstable market expectations, momentum has slowed, they pointed out.

Industrial production rose 4.4 percent in June from a year ago, up from 3.5 percent in May, while retail sales growth slowed to 3.1 percent from 11.7 percent the month before. From January to June, fixed-asset investment rose 3.8 percent from a year ago. 

Industrial output rebounded, but still needs reinforcing, said Li Chao, chief economist at Zheshang Securities. Industrial firms are cautious about expanding capacity because of the pressure on profits and the destocking cycle, Li added.

Despite a slight drop last month, the service sector maintained a relatively high activity level, with face-to-face service providers and those with new momentum kept up a positive trend, Li noted, adding that real estate sales were a bit lackluster.

Consumer sentiment and consumption of services picked up in June, according to Wen Bin, chief economist at China Minsheng Bank. But the foundations were not yet solid and the recovery has slowed, Wen added.

Looking ahead, with the main benchmark interest rates cut last month, the authorities have again emphasized the need to strengthen the regulation of economic policy, said Wang Qing, chief analyst at Golden Credit Rating International.

New policies to steady growth are expected, Wang added. If they materialize, the economic recovery will strengthen in the third quarter and GDP will gain about 5 percent this year, he pointed out.

Rapid consumption growth will be promoted this half with the arrival of the traditional peak consumption season and other positive factors, such as steadier property sales, better car sales, and the strengthening of consumption-related policies and measures, according to Zhixin Investment Research Institute. With policy support, the employment situation may also improve, further boosting consumption, which is likely to cimb by about 10 percent from a year ago, it said.

Editors: Xu Wei, Martin Kadiev