BEIJING (Reuters) Chinas economy unexpectedly slowed in July, with activity indicators from industrial output to retail sales missing forecasts by large margins, pointing to a shaky recovery as Beijing shows no sign of easing its zero-COVID policy.
Industrial output grew 3.8% in July from the year earlier, after expanding 3.9% in June, data from the National Bureau of Statistics (NBS) showed on Monday. That weighed against a 4.6% increase expected by analysts in a Reuters poll.
Retail sales, which only turned positive in June, rose 2.7% from the year ago, greatly missing analysts forecast for 5.0% growth. That weighed against a 3.1% growth in June.
The worlds second-biggest economy narrowly escaped a contraction in the June quarter, hobbled by the lockdown of the commercial hub of Shanghai, a deepening downturn in the house market and persistently soft consumer spending.
However, risks to growth abound as much Chinese cities, including manufacturing hubs and popular tourist spots, imposed lockdown measures in July after fresh outbreaks of the more transmissible Omicron variant were found.
Chinese policymakers try balance shoring up a fragile economic recovery and eradicating emerging COVID clusters with the economy likely to miss its official growth target this season set at around 5.5% for the very first time since 2015.
Fixed asset investment, which Beijing had hoped would drive growth in the next half as exports soften, grew 5.7% in the initial seven months of the entire year from exactly the same period per year earlier, pitched against a forecast 6.2% rise and down from the 6.1% jump in January-June.
The employment situation remained fragile. The nationwide survey-based jobless rate eased slightly to 5.4% in July from 5.5% in June, although youth unemployment stayed stubbornly high, reaching an archive 19.9% in July.
To be able to prop up growth, the central bank on Monday unexpectedly lowered interest levels on key lending facilities for the next time this season. New yuan loans tumbled by a lot more than expected in July as companies and consumers stayed cautious with dealing with debt, data showed on Friday. [B9N2YU01J]
Official data also showed on Monday that new home prices fell 0.9% in July from the year ago, the fastest pace since September 2015, because the property market, which includes been further rocked by way of a mortgage boycott, showed no signs of improving.[L4N2ZO0MP]
(Reporting by Kevin Yao and Stella Qiu; Editing by Sam Holmes)