BEIJING (dpa-AFX) - China's industrial production and retail sales grew at weaker than expected rates in August and fixed asset investment logged only a meagre growth, strengthening the call for both monetary and fiscal stimulus.
Industrial output expanded 5.2 percent on a yearly basis in August, weaker than the 5.7 percent increase in July, the National Bureau of Statistics reported Monday. The rate was expected to remain unchanged at 5.7 percent.
Similarly, annual growth in retail sales eased to 3.4 percent from July's 3.7 percent, while sales were forecast to climb 3.8 percent.
In August, the jobless rate edged up to 5.3 percent from 5.2 percent in July.
During January to August, fixed asset investment rose only 0.5 percent from the same period last year, slower than the 1.6 percent rise in the January to July period. This was much weaker than the expected growth of 1.5 percent.
ING economist Lynn Song said the deceleration can no longer be simply explained away as a temporary weather-related blip.
Given the slowdown of the past few months, there is a strong case for additional short-term stimulus efforts, the economist said.
While it is too early to gauge the impact of the consumer loan subsidies coming into effect this month, it is likely that more policy support is needed, he noted.
The economist expects another 10 basis point rate cut and 50 basis point reserve-requirement-ratio cut in the coming weeks.
Although strong start to 2025 still keeps this year's growth targets within reach, further stimulus support could be needed to ensure a strong finish to the year, said Song.
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