People select food at a supermarket in Xixiu District of Anshun, Southwest China's Guizhou Province. File Photo: Xinhua

Consumption, a major driver of China's economic growth, achieved a stellar first-half performance, with a contribution of 77.2 percent to GDP, far above the year-earlier level.

With support policies in place and more stimulus coming, analysts said that the pulling effect of consumption, in particular in services, will rise in the third quarter.

Retail sales rose 8.2 percent year-on year in the first half to 22.76 trillion yuan ($3.17 trillion), accelerating 2.4 percentage points from the first quarter, the National Bureau of Statistics (NBS) announced on Monday.

 "Consumption is playing a more prominent role in the economic recovery," Fu Linghui, an NBS spokesperson, told a press conference on Monday after key first-half economic indicators were released.

"Unlike the industrial investment-driven model last year, the services industry joined the pulling force this year and its contribution to economic growth has obviously gone up," Fu said.

In the second quarter alone, the momentum of goods consumption seen at the start of the year decelerated, weighing on the economic recovery.

In June alone, retail sales expanded 3.1 percent year-on-year, falling 9.6 percentage points from the gain in May. Sales of goods rose 1.7 percent, down 8.8 percentage points from May. 

Spending on catering was up 16.1 percent, but that was down 19 percentage points from May, according to the NBS data.

Zhou Maohua, an economist at Everbright Bank, told the Global Times on Monday that the high base of comparison last year and a slow recovery of spending on consumer goods brought down the year-on-year retail sales growth rate in June.

"By comparison, consumption in the services sector picked up last month," Zhou said.

"The driving force of consumption in the second quarter weakened compared with the first quarter. The marginal effect of releasing pent-up demand after China reopened its economy at the end of last year is diminishing," Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, told the Global Times on Monday.

"Personal consumption power and confidence, which were affected during the pandemic, have not fully recovered," Wang noted.

But that situation won't change the trend of China's economic recovery, and the recovery momentum is expected to increase in the second half, analysts said, citing the Chinese government's efforts to boost the economy.

"Services consumption represented by tourism, culture and entertainment played a heightened role in the economy's first-half rebound, and that will continue in the remainder of the year," Wang noted.

"For the full year, multiple favorable factors will support consumption growth," Fu noted, referring to domestic consumption's huge potential, the improved consumption environment and consumers' enhanced buying power as their incomes rise.

In the first half, national per capita disposable income increased by 5.8 percent in real terms, quicker than the GDP growth rate of 5.5 percent, according to the NBS.

Experts said that the economy will pick up steam in the second half.

"With more government stimulus programs for consumption in the pipeline, the sector's driving force for the economy will accelerate in the third quarter, lifting personal incomes and employment" Wang said.

An executive meeting of the State Council, the country's cabinet, chaired by Premier Li Qiang on June 29, deliberated and adopted measures to promote the consumption of home appliances.

These measures should be coordinated with steps to improve the quality of housing, such as urban renewal projects, facilities to make residential buildings more elderly-friendly and the optimization of the country's recycling network, the Xinhua News Agency reported. "More stimulus policies to boost consumption, in particular fiscal measures, should be closely watched in the coming period," Wang said.