by The persistent spread of Covid and the resulting stay-at-home orders, mainly in Shanghai, forced factories to close or operate at limited capacity in April. Pictured on May 12 is a refrigerator factory in Hefei, China, about a five-hour drive from Shanghai.
Xi Chen | China Visual Group | fake images
BEIJING — China reported a drop in retail sales and industrial production in April, much worse than analysts expected.
Retail sales fell 11.1% in April from a year earlier, more than the 6.1% drop forecast in a Reuters poll.
Industrial production fell 2.9% in April from a year earlier, contrasting with expectations for a slight 0.4% rise.
Last month, the persistent spread of Covid and the resulting stay-at-home orders, mainly in Shanghai, forced factories to close or operate at limited capacity.
The “increasingly gloomy and complex international environment and the heightened commotion of [the] The covid-19 pandemic at home obviously exceeded expectations, the new downward pressure on the economy continued to grow,” the statistics office said in a statement. The office said the impact of Covid-19 is temporary and the economy is expected to “stabilize and recover.” “
Fixed asset investment for the first four months of the year rose 6.8% from a year earlier, falling short of expectations for 7% growth. Investment in real estate fell 2.7%, while manufacturing increased 12.2% and infrastructure 6.5%.
China’s passenger car production fell 41.1% year-on-year in April, according to the China Passenger Car Association. The auto sector in China accounts for about a sixth of jobs and about 10% of retail sales, according to official 2018 figures compiled by the Ministry of Commerce.
The unemployment rate in China’s 31 largest cities rose to a new high of 6.7% in April, according to data going back to at least 2018.
The unemployment rate in cities rose 0.3 percentage point from March to 6.1% in April. The unemployment rate among those between the ages of 16 and 24 was almost three times higher, at 18.2%.
To get an additional idea of the scale of the economic slowdown in April, other data showed a drop in demand for loans from businesses and households.
Total social financing, a broad measure of credit and liquidity, roughly halved last month from a year earlier to 910.2 billion yuan ($134.07 billion), the People’s Bank of China said late Friday. .
However, Macquarie’s chief China economist Larry Hu said he expected the drop in credit demand to be short-lived. He noted that on Sunday, the central government took its “first step … to save property” by lowering mortgage rates for first-time home buyers.
The rate, which used to follow the five-year loan prime rate as a benchmark, is now 20 basis points below that.
“Today’s cut is far from enough to turn around the housing sector, but more housing relief is to come,” Hu said in a note on Sunday.
Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s.
This is a developing story. Please check for updates.
