Tags: China | Factory | Output | Expectations

China Factory Output Rises but Misses Expectations

Sunday, 10 June 2012 09:30 AM

China's factory output rose 9.6 percent in May from a year ago, data showed on Saturday, missing expectations and further entrenching concerns that the world's second-largest economy may slip into its worst downturn in years.

The Chinese central bank made a surprise move on Thursday, cutting both benchmark lending and deposit rates by 25 basis points to ward off a deep economic downswing.

It also gave banks additional flexibility to set competitive lending and deposit rates in a step moving towards interest rate liberalization.

Economists polled by Reuters had expected China's industrial output to rise 9.9 percent in May, improving a shade from three-year lows of 9.3 percent struck in April.

Fixed asset investment, the second-biggest driver of China's economic growth in the first quarter after consumption, climbed 20.1 percent in the January to May period from a year ago, just above forecasts for a 20 percent rise.

Retail sales underperformed expectations for a 14.3 percent annual growth, rising instead by 13.8 percent in May from a year earlier.

Saturday's data is the latest evidence that China's economy is fast losing steam, a scenario likely to scare global investors who are already unnerved by Europe's financial mayhem, and raises the pressure on Beijing to take bolder policy action to steady growth.

A Reuters poll last month showed analysts forecast the Chinese economy to grow 8.2 percent in 2012 year, its worse performance in 13 years.

© 2020 Thomson/Reuters. All rights reserved.

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Sunday, 10 June 2012 09:30 AM
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