BEIJING, Aug 15 (Reuters) – Broad Chinese data on Tuesday showed the economy slowed further last month, increasing pressure on already faltering growth and pushing authorities to bolster key policies to step up activity. He indicated that he was pushing for interest rate cuts.
Less than an hour before the release of a series of economic data in July, the People’s Bank of China unexpectedly lowered its key policy rate for the first time in three months, rocking global financial markets as the economic recovery from the COVID-19 pandemic accelerated. It became clear that it was lost in
Data released by the National Bureau of Statistics (NBS) on Tuesday showed industrial production grew 3.7% year-on-year, slowing from a 4.4% pace in June. That was below the 4.4% rise expected by analysts polled by Reuters.
Retail sales, a measure of consumption, rose 2.5%, slowing from 3.1% in June and below analysts’ expectations of a 4.5% rise despite the summer travel season. It was the slowest growth since December 2022.
“All key activity indicators were below consensus expectations in July, with most flat or barely expanding month-on-month,” said Julian Evans-Pritchard, an economist at Capital Economics.
Financial difficulties at property developers such as Country Gardens are likely to drag down the housing market in the short term, and the economy could slip into recession if policy support isn’t strengthened soon. He warned.
Asian stocks fell and the dollar strengthened on weak Chinese economic data and the latest policy easing.
After the rate cut, China’s big state-owned banks saw moves to sell the US dollar and buy the yuan to stem a sharp decline in the currency, according to three people familiar with the matter. Sovereign bond yields fell to three-year lows, but benchmark stock indexes fell only marginally on hopes of stimulus.
As the post-coronavirus recovery has lost momentum since the second quarter, policymakers made a series of moves last month, from boosting consumption of cars and appliances, easing some property restrictions to pledging to help the private sector. announced an economic stimulus package.
However, persistent drag on the real estate sector, rising local government debt pressures, high youth unemployment and cooling external demand remain major obstacles to fostering a sustainable economic recovery.
more stimulation
Tuesday’s data showed the broader economy was still underpowered last month, with record-low trade and consumer price data underscoring the need for policymakers to continue pumping more money into the past. The release added to a series of bleak data over the past week, including weakest credit growth. Support measures.
Bruce Pang, chief economist at Jones Lang LaSalle, said: “Today’s data shows how difficult it is for the Chinese economy to navigate headwinds, with challenges from nearly every side and efficient policy support from a few. It shows what,” he said.
Other data on Tuesday showed that fixed asset investment rose 3.4% in the first seven months of 2023 compared to the same period last year, which was expected to rise 3.8%. It increased 3.8% in the January-June period.
Investment in the real estate sector fell by 8.5% from the previous year in January to July after dropping by 7.9% from January to June, marking the 17th straight month of decline.
Demand in the property sector, once a pillar of economic growth, has been sluggish in recent weeks. The Politburo, the ruling Communist Party’s top decision-making body, said last month it needed to adapt to major changes in market demand and supply and optimize property policies in a timely manner.
The unemployment rate, based on a national survey, rose slightly to 5.3% from 5.2% in June.
After the youth unemployment rate rose to a record 21.3% in June, NBS spokesman Fu Linghui said at a news conference Tuesday that the survey-based unemployment rate for 16-24 year olds will be released from August. He said it would stop, adding that China would improve further. its employment statistics.
(1 US Dollar = 7.2838 Chinese Yuan)
Additional reporting by Albee Zhang and Liangping Gao.Editing: Sri Navaratnam
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