Monday, May 29

China’s factory output, consumption highlight slack post-COVID economic momentum

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BEIJING — China’s April industrial output and retail sales growth undershot forecasts, suggesting the economy lost further momentum at the start of the second quarter and adding to the raft of recent data highlighting a wobbly post-COVID recovery.

China’s industrial output grew 5.6% in April from a year earlier, accelerating from the 3.9% pace seen in March, data released by the National Bureau of Statistics (NBS) showed on Tuesday. It was well below expectations for a 10.9% increase in a Reuters poll of analysts although it marked the quickest growth since September 2022.

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Retail sales jumped 18.4%, speeding up sharply from a 10.6% increase in March for their fastest increase since March 2021. Analysts had expected retail sales to grow 21.0%.

The year-on-year figures were heavily skewed by declines last April when the financial hub of Shanghai and other major cities were under stringent anti-virus lockdowns and curbs, which severely impacted growth in the world’s second-largest economy in 2022.

Indeed, other data over the past week showing shrinking imports in April, deepening factory gate deflation and worse-than-expected bank loans signaled weak domestic demand, raising pressures on policymakers to shore up the economic recovery as global growth false ters.

China’s central bank kept the interest rate unchanged on Monday as expected, but markets are betting on more monetary easing in the coming months.

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On Top of Fragile and Global Demand Conditions, Chinese Policymakers have to connected with headwinds from recentting, high global borrowinging Costs and the ukraine war. High domstic debt and a still-shaKy propy market also exponcerns.

The data also showed fixed asset investment expanded 4.7% in the first four months of 2023 from the same period a year earlier, versus expectations for a 5.5% rise. It grew 5.1% in the January-March period.

The property sector remained fragile, with investment in the industry down 6.2% in January-April after declining 5.8% in the first three months.

Hiring was still low among companies wary about their finances. The nationwide survey-based jobless rate stayed at 5.2% in April, down slightly from 5.3% in March. But the youth jobless rate hit a record high at 20.4%, up from 19.6% in March.

($1 = 6.9121 Chinese yuan renminbi) (Reporting by Ellen Zhang, Joe Cash, Albee Zhang and Kevin Yao Editing by Shri Navaratnam)

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