New China data highlights weak economy in May

City A.M. Reporter
CHINA’S growth could slow further after data released yesterday showed subdued activity right across the economy in May in the face of sustained global weakness, raising the possibility of interest rate cuts.

Evidence has mounted in recent weeks that China’s economy is fast losing growth momentum, with sluggish domestic demand failing to make up for lethargic export sales as the country’s main trading partners wrestle with their own slowdowns. A raft of figures over the weekend added to that evidence, with exports in May posting the lowest growth in almost a year, inflation, growth in bank lending and investment below expectations and factory output and retail sales growing only about the same pace as in previous months.

“(The) activity numbers indicate continued expansion but growth remains unconvincing and the momentum seems to have lost pace in May,” said Louis Kuijs, an economist at RBS.

China’s consumer inflation slowed to 2.1 per cent, the lowest in three months, while producer prices fell 2.9 per cent, the lowest since September.