BEIJING- China’s economy lost more steam in November as factory output slowed and retail sales extended declines, both missing forecasts and clocking their worst readings in six months, hobbled by surging COVID-19 cases and widespread virus curbs.
The data suggested a further deterioration in economic conditions as lockdowns in many cities, a property-sector crunch and weakening global demand pointed to a bumpy road ahead even as Beijing ditched some of the world’s toughest anti-virus restrictions.
Industrial output rose 2.2 percent in November from a year earlier, missing expectations for a 3.6 percent gain in a Reuters poll and slowing significantly from the 5.0 percent growth seen in October, the National Bureau of Statistics (NBS) data showed on Thursday.
It marked the slowest growth since May when Shanghai was under lockdown, partly due to disruptions in key manufacturing hubs Guangzhou and Zhengzhou.
Retail sales fell 5.9 percent amid broad-based weakness in the services sector, also the biggest contraction since May. Analysts had expected the gauge of consumption to shrink 3.7 percent, accelerating from a 0.5 percent dip in October.
In particular, sales in the contact-intensive catering sector fell 8.4 percent from a year earlier, accelerating from the 8.1 percent decline in October.
Meanwhile, automobile production slumped 9.9 percent, swinging from an 8.6 percent gain in October.
“The weak activity data suggest that the policy needs to be eased further to revive the growth momentum,” said Hao Zhou, chief economist at GTJAI. “The increased size of the MLF rollover this morning is in line with the overall easing policy tones. Looking ahead, we also forecast that the rates for MLF will be lowered by 10bps next Q1.” — Reuters
