BEIJING (REUTERS) – China’s factory output and retail sales both rose more slowly than expected in July from a year ago, data showed on Monday (Aug 16), amid signs of increasing pressure on China’s economy as export growth cooled and new Covid-19 outbreaks disrupted business.
Industrial production in the world’s second-largest economy increased 6.4 per cent year on year in July, against expectations for 7.8 per cent growth and after rising 8.3 per cent in June.
China’s economy has rebounded to its pre-pandemic growth levels, but the expansion appears to be losing steam as businesses have grappled with higher costs and supply bottlenecks while new Covid-19 infections in July prompted some local authorities to lock down and temporarily suspend business operations.
Data earlier this month also showed export growth, which has been a key driver of China’s impressive rebound from the Covid-19 slump in early 2020, unexpectedly slowed last month.
Consumption remained weak with retail sales rising 8.5 per cent year on year in July. Analysts had expected retail sales to increase 11.5 per cent after a 12.1 per cent uptick in June.
China has tightened social restrictions to fight its latest Covid-19 outbreak in several cities, hitting the services sector, especially travel and hospitality in the country.
Fixed asset investment grew 10.3 per cent in January-July from the same period a year ago, compared with an 11.3 per cent rise tipped by a Reuters poll and a 12.6 per cent increase in January-June.
Private sector fixed-asset investment, which accounts for 60 per cent of total investment, grew 13.4 per cent in the first seven months of the year, compared with a 15.4 per cent gain in the period from January to June.
Property investment, a crucial growth driver of China’s recovery from Covid-19 disruptions, grew 12.7 per cent in January to July, versus 15 per cent rise in the first half of this year.