In July, China’s industrial output and retail sales were largely in line with consensus forecasts, but fixed-asset investment unexpectedly slowed as the contraction in property investment worsened, the economist at UOB GroupHo Woei Chen.
Uneven growth in July with weak retail sales
“China’s industrial production and retail sales were broadly in line with consensus forecasts, but fixed-asset investment unexpectedly slowed, and surveyed unemployment rates rose in July. The property market remained on a downward trend with prices, residential property sales value and real estate investment continuing to fall.”
“Although loan demand tends to be seasonally weaker in July, the weaker-than-expected data has further raised concerns about a financial balance sheet recession in China, where monetary policy easing is losing its effectiveness in boosting demand due to weak sentiment.”
“There is scope for LPRs to be cut further next week (Aug 20) to reflect the larger-than-usual 20bp cut to the 1-year MLF on Jul 25. In the near term, there is also the possibility of a 50bp cut to the reserve requirement ratio (RRR). The weak data also call for stronger fiscal measures to boost private consumption. With the overall picture remaining mixed, we expect China’s growth to moderate from 5.0% in H1 2024 to 4.8% in H2 2024, with annual GDP growth likely at 4.9%.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
