China’s economic recovery weakened in May as growth in industrial output and retail sales slowed, putting pressure on policymakers to step up stimulus.
- Industrial production rose 3.5% in May from a year earlier, the National Bureau of Statistics said Thursday, in line with the median estimate in a Bloomberg survey of economists
- Retail sales climbed 12.7%, missing the median estimate of a 13.7% increase
- Growth in fixed-asset investment slowed to 4% in the first five months of the year, weaker than forecasts of a 4.4% uptick
- The urban jobless rate was unchanged at 5.2%
The figures came after the People’s Bank of China cut the interest rate on its one-year policy loans by 10 basis points to 2.65% to stimulate the economy. The central bank reduced its short-term rates earlier this week.
China’s recovery has lost momentum in recent months after an initial boost in activity in the first quarter following the ending of pandemic restrictions. The economy faces a number of headwinds, including weak business and consumer confidence, a faltering property market and slowing global demand for exports.
The central bank has shifted to easing mode, with economists forecasting more monetary policy stimulus in coming months, including interest-rate cuts or reductions in the amount of cash banks have to keep in reserve.
Authorities are also considering a broad package of stimulus measures to support areas such as real estate and domestic demand, according to people familiar with the matter. The State Council may discuss those policies as soon as Friday.