Investing.com -- Morgan Stanley lowered its full-year GDP forecast for China by 20 basis points to 4.6% after June activity growth came in at 4.3%, missing both consensus estimates and Beijing's target.

The investment bank identified slower infrastructure development following first-quarter front-loading, reduced refining and petrochemical production due to oil prices, and weaker consumption as the main factors behind the shortfall. The consumption weakness stemmed from fading trade-in program effects, a soft job market, and ongoing property sector challenges.

Morgan Stanley's China economics team said policy focus is expected to remain on artificial intelligence and energy infrastructure rather than consumption, as US-China technology competition increases. The team does not anticipate a supplementary budget, noting that approximately 2 trillion yuan of in-budget fiscal resources remain available for the second half of the year.

The firm expects moderately stronger sequential growth in the second half, supported by faster budget deployment and normalizing oil prices.

China's property sector continued to decline in June, with new property starts falling 26.0% year-over-year and gross floor area sold dropping 16.3% year-over-year. Morgan Stanley's property team said home sales declined further in June after reversing an uptrend that began in May.

Fixed asset investment decreased 11.2% year-over-year in June. Industrial production rose 5.3% year-over-year in June, up from 4.5% in May, while the purchasing managers index reached 50.3 in June compared to 50 in May.

Steel exports increased 7% year-over-year to 10.3 million tons in June, while crude steel output rose 0.4% year-over-year. Iron ore imports climbed 6% year-over-year to 113 million tons in June. Aluminum production increased 4.7% year-over-year to 4.0 million tons.