China's July retail sales unexpectedly slip, factory output growth steady

People wear masks at a main shopping area after the city's emergency alert level for coronavirus disease (Covid-19) was downgraded, in Shanghai March 23, 2020. — Reuters pic
People wear masks at a main shopping area after the city's emergency alert level for coronavirus disease (Covid-19) was downgraded, in Shanghai March 23, 2020. — Reuters pic

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BEIJING, Aug 14 ― China's retail sales unexpectedly fell in July from a year ago while the comeback in factory output was slower than forecast amid signs the recovery in the world's second-largest economy remains fragile.

Industrial output grew 4.8 per cent in July from a year earlier, data from the National Bureau of Statistics showed today, in line with June's growth and missing analysts forecast for a 5.1 per cent rise.

Retail sales dropped 1.1 per cent on year, worse than a predicted 0.1 per cent rise and compared with a 1.8 per cent drop in June. Sales fell for the seventh straight month as consumer demand remained sluggish despite strict coronavirus containment measures easing.

China's recovery had been gathering pace after the pandemic paralysed huge swathes of the economy as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound, which analysts say have reduced the urgency for more monetary stimulus.

China's economy returned to growth in the second quarter after a deep slump at the start of the year, but unexpected weakness in domestic consumption has strained the recovery momentum.

Fixed-asset investment fell 1.6 per cent in January-July from the same period last year, in line with expectations and recovering from a 3.1 per cent decline in the first half of the year.

Private sector fixed-asset investment, which accounts for 60 per cent of total investment, fell 5.7 per cent in January-July, compared with a 7.3 per cent decline in the first half of the year.

Infrastructure investment, a powerful driver of growth, fell 1.0 per cent year-on-year, easing from a decline of 2.7 per cent in the first half. ― Reuters

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