From Reuters, September 14:
China's factory output and retail sales reported their weakest growth since last year in August, keeping pressure on Beijing to roll out more stimulus to fend off a sharp slowdown in the world's second-largest economy.
The disappointing data split economists over whether policymakers would need more near-term fiscal support to hit their annual growth target of "around 5%," with manufacturers awaiting more clarity on a U.S. trade deal and domestic demand curbed by a wobbly job market and property crisis.
Industrial output grew 5.2% year-on-year, National Bureau of Statistics data showed on Monday, the lowest reading since August 2024 and weaker than a 5.7% rise in July. It also missed forecasts for a 5.7% increase in a Reuters poll.
Retail sales, a gauge of consumption, expanded 3.4% in August, the slowest pace since November 2024, and cooling from a 3.7% rise in the previous month. They missed a forecast gain of 3.9%.
"The strong start to the year still keeps this year's growth targets within reach, but similar to where we were at this time last year, further stimulus support could be needed to ensure a strong finish to the year," said Lynn Song, chief economist, Greater China at ING.
"The strong start to the year still keeps this year's growth targets within reach, but similar to where we were at this time last year, further stimulus support could be needed to ensure a strong finish to the year," said Lynn Song, chief economist, Greater China at ING."While it is too early to gauge the impact of the consumer loan subsidies coming into effect in September, it is likely that more policy support is still needed, given the broader slowdown across the board. We continue to see a high possibility for another 10bp rate cut and 50bp RRR cut in the coming weeks."Fixed-asset investment also grew at a slower-than-expected 0.5% pace in the first eight months year-on-year, from 1.6% in January-to-July, marking its worst performance outside the pandemic.Authorities are leaning on manufacturers to find new markets to offset U.S. President Donald Trump’s unpredictable trade policy and weak consumer spending....
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