Chinese Industrial Data Suggests Sluggish Stimulus Response
China’s industrial output growth ticked higher in April while investment slowed to the weakest pace in more than 14 years, suggesting monetary easing is trickling through the economy while more may be needed to spur a pick-up.
Industrial output rose 5.9 percent in April from a year earlier, up from March’s 5.6 percent, and non-rural fixed-asset investment climbed 12 percent in the year through April, data from the National Bureau of Statistics showed Wednesday.
Beset by corruption, pollution, a debt hangover and excess capacity, China’s leaders are seeking to rein in past excesses while avoiding a hard landing. Premier Li Keqiang opened the monetary tap with the third interest rate cut in the last six months on Sunday, and economists forecast more such moves.
“The darkest moment of the first quarter is already behind us, but the economy is still very weak,” said Larry Hu, head of China economics at Macquarie Securities in Hong Kong. “The government will continue to add more stimulus.”
Retail sales rose 10 percent in April from a year earlier, missing economists forecast for 10.4 percent. Fixed asset investment expanded less than the 13.5 percent seen by analysts, while industrial production compared with the median estimate of 6 percent in a Bloomberg survey of economists.
Inflation remained subdued in April and exports and imports both slid, prompting the People’s Bank of China to cut interest rates by a quarter of percentage point.
Source: Bloomberg – Chinese Industrial Data Suggests Sluggish Stimulus Response
