by The world’s second-largest economy reported shocking declines in retail sales and factory output, below market expectations.
Retail sales shrank 11.1% in April from a year earlier, according to China’s National Bureau of Statistics on Monday. That was well below the 6.1% drop forecast in a Reuters survey of economists, and also much lower than the 3.5% decline seen in March.
Industrial production fell 2.9% last month from a year earlier, reversing a 5% gain in March.
Unemployment also rose to the second highest level on record.
The urban unemployment rate hit 6.1% in April, up from 5.8% in March, which was already at a 21-month high. The only time China’s unemployment rate was higher was in February 2020.
strong hit
“We think second-quarter GDP growth will probably turn negative,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said on Monday.
“The government faces mounting pressure to launch new stimulus to stabilize the economy,” Zhang said.
The leadership in China is aware of the economic pains and has recently taken some steps to provide relief.
The People’s Bank of China announced on Sunday that it would lower the mortgage rate for first-time home buyers, in a move to lift the ailing property market.
Separately, the Shanghai government said the city will gradually open shops, restaurants and beauty salons from Monday, which will be a relief to its 25 million people.
But “risks to the outlook are tilted to the downside, as the effectiveness of stimulus policies will largely depend on the scale of future Covid outbreaks and lockdowns,” Tommy Wu, chief economist at Oxford Economics, said on Monday. for Chinese.
“We forecast GDP to grow 4% this year, with a quarterly contraction in the second quarter before growing again in the second half.”
– CNN’s Beijing bureau contributed to this report.
