Chinese factory production slows in July amid weak domestic demand
Date
8/15/2024 4:03:02 AM
(MENAFN) China's industrial production growth slowed to 5.1 percent year-on-year in July, down from 5.3 percent in June, indicating a softening in domestic demand that may necessitate additional policy interventions to stabilize the nation's fragile economic recovery. The National Bureau of Statistics' latest data released on Thursday highlighted this dip, which also fell short of market expectations, as a survey of 42 analysts had projected a 5.2 percent increase. This underperformance underscores the ongoing challenges facing China's manufacturing sector, which has been grappling with both internal and external pressures, including slowing global demand and persistent supply chain disruptions.
Despite the weaker-than-expected industrial output, retail sales offered a glimmer of hope for China's economy. July saw retail sales climb by 2.7 percent compared to the same month last year, marking a modest improvement from June's 2 percent growth. This uptick in consumer spending, though slight, suggests that consumption is beginning to recover, albeit at a slower pace than some analysts had anticipated. The 2.7 percent growth slightly surpassed market predictions, as analysts had forecasted a 2.6 percent increase, reflecting cautious optimism that consumer confidence may be gradually returning amid government efforts to stimulate demand.
However, the overall economic outlook remains mixed, with the slowdown in factory output casting a shadow over the broader recovery. The divergence between industrial production and retail sales highlights the uneven nature of China's economic rebound, which has been hampered by ongoing uncertainties both domestically and globally. The weaker factory output could prompt Chinese policymakers to implement more targeted measures to bolster growth, particularly in sectors most affected by the downturn, as they strive to ensure a more balanced and sustained economic recovery.
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