China's economy is expected to gradually overcome the negative impacts of the epidemic in the second half of this year, with economic indicators showing improvement amid a raft of supportive policies, according to a report by the Bank of China.

Noting that risks including rising global inflation, geopolitical tensions and volatile international financial markets might continue to weigh on the economic outlook, the report said domestic demand will play a key role in stabilizing the country's growth during the second half of the year.

It added that China's economic fundamentals and potential for long-term growth remain unchanged.

Despite the challenges, the country's employment has remained stable and the price rise has been kept within a moderate range, leaving more room for authorities to maneuver macro policies, according to the report.

Going ahead, the report has suggested leveraging fiscal and monetary policies further to help enterprises tide over difficulties, and expand effective investment and stabilize growth.

More efforts should be made to spur consumption, promote the steady development of the real estate sector, and foster long-term competitiveness through technological upgrading and innovation, the report said.