China’s economy dials back a notch as output, investment slow

Workers dismantle used television sets at a recycling plant in Neijiang, Sichuan province June 11, 2018. — Reuters pic
Workers dismantle used television sets at a recycling plant in Neijiang, Sichuan province June 11, 2018. — Reuters pic

BEIJING, June 14 — China’s economy showed signs of losing steam in May, with an unexpected slowdown in factory output and lacklustre investment and consumption.

Industrial output rose 6.8 per cent in May from a year earlier, versus a projected 7 per cent in a Bloomberg survey, which was also the reading in April. Retail sales expanded 8.5 per cent from a year earlier, versus a forecast 9.6 per cent.

Fixed-asset investment rose 6.1 per cent year-on-year in the first five months, compared with an estimated 7 per cent. Surveyed jobless rate in urban areas fell to 4.8 per cent from 4.9 per cent in April.

With a sharp deceleration in credit growth and the threat of a worsening trade dispute with the US, Chinese businesses face an increasingly uncertain outlook. The central bank has tried to support growth by increasing liquidity.

“Going forward, the real economy will be under even higher pressure” as investment continues to slowdown, and relations with the US continue to be tense, Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis SA, wrote in a recent note. — Bloomberg

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