China’s factory data disappoints analysts, suggesting more stimulus is needed
China’s industrial output, investment and
retail sales growth missed analysts’ estimates in January and
February, showing the weakest result in six years and suggesting more stimulus is needed to spur the
world’s second-largest economy.
In January and February, factory production rose 6.8 percent, the National Bureau of Statistics said in
Beijing Wednesday, compared with the median projection for 7.7
percent in a Bloomberg survey.
Retail sales advanced 10.7 percent and fixed-asset investment increased 13.9 percent.
Last week Premier Li Keqiang set the nation’s 2015
expansion target at about 7 percent, the slowest in more than 15
years, as China is struggling with the debt, pollution and
corruption flourished in a three-decade-long economic boom.
The central bank has sought to cushion the slowdown with two interest rate cuts and one reduction to banks’ reserve requirements in the past four months.
“At this pace of growth, the government will struggle to achieve the 7 percent target,” said Wang Tao, chief China economist at UBS Group AG in Hong Kong. “More policy support should come, including more proactive fiscal policies and more relaxation on real estate policies.”
China combines data for industrial output, retail sales and fixed-asset investment for January and February due to distortions from the week-long Lunar New Year holiday, which has different timings. This year, the holiday began Feb. 18.
The two-month industrial output reading shows the slowest start to a year since 2009. The value of property sales fell 15.8 percent in the two months from the same period a year earlier, reflecting a housing plunge that’s weighing on investment and retail spending.
