After a record expansion in the January quarter, growth in April, including retail sales, slowed, showing a patchy recovery.
China’s economy slowed in April from the jump the month before, as factory output slowed and retail sales fell short of analysts’ expectations, indicating increased pressure on the recovery in consumption.
Industrial production rose 9.8% in April from a year ago, slower than the 14.1% surge in March, according to data from the National Bureau of Statistics (NBS) on Monday, but matching the analysts’ consensus forecasts from a Reuters poll.
China’s gross domestic product (GDP) grew a record 18.3% in the first quarter and many economists expect growth to exceed 8% this year.
Some warn that continued disruptions to the global supply chain and higher baselines will undermine momentum in the coming quarters.
China’s economy showed steady improvement in April, but new problems are also emerging, Fu Linghui, a spokesperson for NBS, said at a press briefing in Beijing on Monday. “The foundations for domestic economic recovery are not yet solid,” he said.
China’s skyrocketing growth figures in the first months of the year were boosted by the poor comparison to an economy crippled by COVID-19 during the same period a year earlier.
Retail sales were up 17.7 percent year-over-year in April, much lower than the 24.9 percent rise analysts expected and down from the 34.2 jump percent observed in March.
Consumption is expected to maintain a steady recovery, Fu said.
Home appliance sales growth fell particularly sharply in April from the previous month, from 38.9% year-on-year growth in March to 6.1%, according to NBS data.
Capital investment, or investment in factories and machinery, rose 19.9% in the first four months compared to the same period a year earlier, compared to an expected increase of 19%, slowing relative to the 25.6% increase from January to March.
Private sector investment in fixed assets, which accounts for around 60% of total investment, increased by 21% in January-April, compared to 26% in the first three months.
Asian stock markets were mixed on Monday after the data was released.
Uneven economic recovery
A high-level decision-making body of the ruling Communist Party said last month that the country would encourage industrial and private investment to recover as quickly as possible.
The Politburo meeting chaired by President Xi Jinping also warned that China’s economic recovery remains uneven and its foundations are not yet solid.
Exports unexpectedly accelerated in April and import growth reached a 10-year high, on the back of strong demand for Chinese products amid a sustained economic recovery in the United States and a freeze on industrial production in the United States. other countries.
However, April also saw factory activity slow as supply bottlenecks and rising costs weighed on production.
The authorities are committed to gradually reducing the monetary and fiscal stimulus injected into the economy last year, without drastic policy changes. Recent data shows a noticeable slowdown in credit in April, suggesting that the exit could materialize at a faster pace than expected. The central bank injected medium-term liquidity into the financial system on Monday to match the amount due, a move widely expected by analysts.