close_game
close_game

Downbeat China factory output, retail sales make case for stronger stimulus

Reuters |
Sep 14, 2024 09:21 AM IST

CHINA-ECONOMY/ACTIVITY (WRAPUP 1, PIX):WRAPUP 1-Downbeat China factory output, retail sales make case for stronger stimulus

*

Downbeat China factory output, retail sales make case for stronger stimulus
Downbeat China factory output, retail sales make case for stronger stimulus

China's Aug industrial output growth slowest since Mar

*

Retail sales growth downbeat despite travel peak

*

Property sales, investment slump in Jan-Aug

*

Extreme weather disrupts growth, says NBS

By Kevin Yao, Ethan Wang and Ellen Zhang

BEIJING, Sept 14 - China's industrial output growth slowed to a five-month low in August, while retail sales and new home prices also weakened further, raising the case for bolder stimulus to shore up the world's second-largest economy.

The sluggish data released on Saturday echoed soft bank lending figures on Friday, underscoring weak growth momentum of the world's second-biggest economy in the third quarter.

Industrial output in August expanded 4.5% year-on-year, slowing from the 5.1% pace in July and marking the slowest growth since March, data from the National Bureau of Statistics showed on Saturday.

That missed expectations for 4.8% growth in a Reuters poll of 37 analysts.

Retail sales, a key gauge of consumption, rose only 2.1% in August, decelerating from a 2.7% increase in July amid the summer travel peak. Analysts had expected retail sales, which have been anaemic all year, to grow 2.5%.

"The momentum is slowing down...The bottleneck remains domestic demand," said Xing Zhaopeng, ANZ's senior China strategist.

"The Q3 GDP is likely to be lower than Q2 based on current data flows. We expect large-scale stimulus to come soon."

President Xi Jinping urged authorities on Thursday to strive to achieve the country's annual economic and social development goals, state media reported, amid expectations that more steps are needed to bolster a flagging economic recovery.

Faltering Chinese economic activity has prompted global brokerages to scale back their 2024 China growth forecasts to below the government's official target of around 5%.

The protracted property slump has led to Chinese consumers cutting back on spending. Some experts have even proposed distributing shopping vouchers to counter the trend.

Premier Li Qiang said last month the country will focus on stimulating consumption and look at measures to boost household income.

A central bank official said last week China still has room to lower the amount of cash banks must hold as reserves while it faces some constraints in cutting interest rates.

NO PROPERTY SECTOR REBOUND

Fixed asset investment rose 3.4% in the first eight months of 2024 from the same period a year earlier, compared with an expected 3.5% expansion. It grew 3.6% in the January to July period.

Liu Aihua, spokesperson of NBS, said at a press conference on Saturday that China's economic operations remained stable, but high temperatures and natural disasters affected growth last month.

Cash-strapped local governments issued bonds at a quicker pace in August for construction of major projects, with Liu saying the quickening bond issuance and policy initiatives will support investment growth.

Meanwhile, the troubled property sector remains a major drag on growth. China's new home prices fell at the fastest pace in more than nine years in August. Only two of 70 surveyed cities reported home prices gains both in monthly and annual terms in August.

Property sales and investment slumped in the first eight months of the year.

While Beijing has ramped up efforts to rescue the housing market, many analysts say much more aggressive steps are needed to help debt-laden developers and encourage would-be home buyers back to the market.

Analysts at Nomura expect bolder measures to be released in the fourth quarter.

This article was generated from an automated news agency feed without modifications to text.

Stay updated with the...
See more
Stay updated with the latest Business News on Petrol Price, Gold Rate, Income Tax Calculator along with Breaking News Events and Latest News Updates on Hindustan Times.
SHARE THIS ARTICLE ON
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Sunday, October 13, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On