Industrial output and retail sales slump in July after one of the country\u2019s weakest quarterly growth rates ever<\/p>\n
China\u2019s economy is showing signs of extending a slowdown with a slump in industrial output and retail sales in July, adding to pressure on Beijing to intervene with measures to support activity.<\/p>\n
After the world\u2019s second largest economy posted one of its lowest quarterly growth readings on record in the three months to June, the latest figures suggest it continued to falter in July.<\/p>\n
Factory output grew 4.5% from a year earlier last month, compared with 5.3% in June, official figures from the National Bureau of Statistics (NBS) showed on Monday, missing a Reuters poll forecast for 4.8% growth.<\/p>\n
Separate figures showed retail sales grew 0.6%, a slowdown from a 1% rise in June despite summer holiday tourism spending. Forecasters had predicted 1.5%.<\/p>\n
The NBS said extreme weather, including high temperatures and heavy rainfall, had disrupted market supply and demand.<\/p>\n
The latest snapshot, however is likely to increase pressure on policymakers to accelerate plans for tax and spending measures to support activity.<\/p>\n
China\u2019s premier, Li Qiang, suggested on Monday that efforts to bolster overseas demand for goods could be used to make up for weak domestic demand.<\/p>\n
\u201cCurrently, the \u2060problem of insufficient \u2060domestic demand remains prominent, some industries and enterprises are facing increasing difficulties, and uncertainties in external environment are rising,\u201d Li told \u2060a meeting of China\u2019s state council, according to the state news agency, Xinhua.<\/p>\n
\u201cWe should actively stabilise external demand, expand mutually beneficial international economic and trade cooperation and \u2060promote balanced trade development.\u201d<\/p>\n
Analysts say they expect stronger growth rates later this year, supported by spending measures from Beijing to increase activity.<\/p>\n
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\u201cThe silver lining is that the boost to manufacturing activity from AI capex [capital expenditure] continued to build, and that the wider weakness partly reflects temporary disruptions from recent typhoons,\u201d said Julian Evans-Pritchard, the head of China economics at the consultancy Capital Economics.<\/p>\n
\u201cWe still expect a modest uptick in growth over the rest of the year, supported by fiscal loosening.\u201d<\/p>\n
The latest snapshot comes after China posted a worse-than-expected annualised growth rate of 4.3% in the three months to June, one of its lowest quarterly readings on record.<\/p>\n