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China's Industrial Output, Retail Sales Growth Eases In August

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China's industrial production and retail sales growth weakened in August and fixed asset investment logged its slowest growth since 1999, as measures to curb excessive lending and reduce overcapacity weighed on activity.

Industrial production climbed 6 percent year-on-year in August, slower than the 6.4 percent increase seen in July, data from the National Bureau of Statistics showed Thursday.

Output growth was forecast to accelerate to 6.6 percent. The pace of expansion was also the weakest seen so far this year.

Similarly, retail sales growth eased to 10.1 percent in August from 10.4 percent in July. This was the slowest growth since January to February this year and below the expected rate of 10.5 percent.

During January to August, fixed asset investment increased 7.8 percent from previous year, after rising 8.3 percent in the first seven months of the year. The latest annual expansion was the slowest since 1999.

The main culprit for weak activity and spending was a slowdown in infrastructure investment, which also weighed on industrial output, Julian Evans-Pritchard, an economist at Capital Economics, said.

The economist expects further weakness ahead, as fiscal policy becomes less supportive and the drag from slowing credit growth intensifies.

Another report from the NBS showed that property investment advanced 7.9 percent in the first eight months of the year, the same rate of growth as seen in January to July period.

by RTT Staff Writer

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