China's Economic Slowdown Persists: Industrial and Retail Sectors Stumble
China's economic growth moderated further in August with industrial output, retail sales, and new home prices all showing signs of weakness. The data hints at a need for more aggressive stimulus measures. Analysts predict that without substantial intervention, the third quarter GDP could dip below second quarter levels.
China's industrial output growth decelerated to a five-month low in August, according to data released on Saturday. This slow growth underscores the flagging momentum of the world's second-largest economy. Retail sales and new home prices exhibited further declines, adding to the overall economic sluggishness.
August's industrial output expanded by 4.5% year-on-year, slower than the 5.1% growth seen in July. Retail sales, an essential indicator of consumption, increased only by 2.1%, falling short of analyst expectations. The slowdown in consumption has prompted discussions around possible large-scale stimulus, with experts forecasting a dip in Q3 GDP compared to Q2.
Faltering economic indicators have also led global brokerages to lower their growth forecasts for China below the government's target of around 5% for 2024. Amid concerns over a prolonged property slump, China's leadership is addressing the need to stimulate consumption and support household incomes, with further policy interventions likely in the near future.
(With inputs from agencies.)
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