China industrial production grew at a steady pace in July, while retail sales logged an unexpected fall as social distancing and floods weighed on consumption, data from the National Bureau of Statistics revealed Friday.
Industrial production grew 4.8 percent on a yearly basis in July, the same rate of growth as seen in June. This was the fourth consecutive decrease. However, the rate was weaker than the expected rise of 5.1 percent.
At the same time, retail sales dropped 1.1 percent from last year, confounding expectations for an increase of 0.1 percent. Sales had declined 1.8 percent in June.
During January to July period, fixed asset investment decreased 1.6 percent versus a 3.1 percent decrease in January to June. The rate came in line with expectations.
At 5.7 percent, the unemployment rate was unchanged from June.
In general, the national economy continued to recover steadily in July, and major economic indicators continued to improve, the NBS said. However, the coronavirus epidemic is still spreading globally.
The international economic environment is severe and complex, the NBS added.
Rebounding from the unprecedented downturn posed by the coronavirus pandemic, China’s economy had expanded 3.2 percent in the second quarter, after contracting 6.8 percent in the first quarter.
A slowdown in China’s economic recovery was always likely at some point as the initial boost from re-opening faded, Julian Evans-Pritchard, an economist at Capital Economics, noted.
The economist still anticipates a further gradual improvement in activity in the coming months on the back of policy support.
Economic growth will not be as fast as it would have been if the rest of the world recovered from Covid-19 and export demand picked up, Iris Pang, an ING economist said.
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