China’s industrial production and retail sales grew weaker-than-expected in July amid subdued expansion in fixed asset investment, highlighting difficulties in the domestic economy that are over and above the external uncertainties.
Industrial production growth held steady at 6 percent annually in July, data from the National Bureau of Statistics showed Tuesday. Economists had forecast a faster growth of 6.3 percent.
Retail sales grew at a slower pace of 8.8 percent year-on-year in July, slower than the 9 percent increase in June. Sales were forecast to climb 9.1 percent in July.
In the first seven months of 2018, fixed asset investment grew 5.5 percent from the same period of last year compared to 6 percent increase in the January to June period.
Another report from the NBS showed that housing sales advanced 16.2 percent and sales of commercial units grew 5.5 percent.
The activity and spending data for July all came in below consensus expectations, despite surprisingly strong external demand, Julian Evans-Pritchard, an economist at Capital Economics, noted.
The economist said this highlights the continued strong headwinds to domestic demand from slower credit growth.
The urban unemployment rate rose to 5.1 percent in July from 4.8 percent a month ago, the statistics bureau reported.
In July, China’s State Council decided to take more “proactive” fiscal steps to help the economy grow in a reasonable pace amid external uncertainties, but to avoid a strong stimulus.
The International Monetary Fund had urged Chinese authorities to ‘stay the course’ and not to loosen credit if growth falls below target.