China’s May factory output, retail sales growth miss expectations

BEIJING  – China’s industrial output rose 3.5 percent in May from a year earlier, official data showed on Thursday, slightly missing expectations, as faltering demand at home and abroad adds pressure on policymakers to shore up a shaky economic recovery.

May’s expansion marked the slowest growth since February.

Analysts polled by Reuters had expected output growth to cool to 3.6 percent from 5.6 percent in April.

Retail sales, a key gauge of consumption, jumped 12.7 percent in May from a year earlier, according to the National Bureau of Statistics, slowing from the 18.4 percent gain in April.

Analysts had expected a 13.6 percent increase.

Fixed asset investment expanded 4 percent in the first five months of 2023 from the same period a year earlier, versus expectations for a 4.4-percent rise. It grew 4.7 percent in January-April.

Analysts have cautioned that China’s data readings last month may be highly distorted by comparisons with a very weak performance last year, when many cities were under stringent COVID lockdowns. But a first-quarter economic rebound has clearly lost a significant amount of momentum, prompting the central bank this week to cut some key interest rates.

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