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China's economy stabilizes in May, data show
By Wang Yanlin |
June 9, 2012, Saturday
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Online Edition
Online Edition
CHINA'S economic performance turned out to be stabilizing in May from April's sharp deterioration 鈥 although it remained rather weak and consumer prices grew at the slowest pace in nearly two years, giving more space for easing policies.
Industrial production last month expanded 9.6 percent from a year earlier, up 0.3 percentage point from that in April, the National Bureau of Statistics said today. Fixed-asset investment increased 20.1 percent to 10.8 trillion yuan (US$1.7 trillion) in the first five months, almost the same as the growth of 20.2 percent in the first four months.
Retail sales gained 13.8 percent to 1.67 trillion yuan in May, slower from the pace of 14.1 percent a month ago.
The performance was largely in line with earlier market expectation which pointed to signs of stabilization and pin hope on a bottoming-out economy in the current quarter.
"Except the retail sales, industrial production and investment's data came out as we had expected," said Helen Qiao, managing director at Morgan Stanley Research. "They confirmed growth is stabilizing after the downside surprise in April."
But weaker-than-expected retail sales growth indicated a sizable deterioration in domestic demand, said Zhou Hao, an economist at Australia and New Zealand Banking Group.
"It showed requirement for a faster implementation of fiscal policy," Zhou said. "With the announced stimulus measures gradually filtering through, we expect growth momentum in real activities to pick up strongly from this month onward."
Another unexpected spot was the consumer prices, which rose at the slowest pace in 23 months and brushed off concerns of stubborn inflationary pressure.
Consumer Price Index, the main gauge of inflation, expanded 3 percent from a year earlier last month. It compared with the pace of 3.4 percent in April and previous market estimation of 3.2 percent.
Producer Price Index, the factory-gate yardstick of inflation and a harbinger of future consumer prices, dropped 1.4 percent last month, extending the loss stream for a third month and deepening from April's 0.7 percent fall.
Industrial production last month expanded 9.6 percent from a year earlier, up 0.3 percentage point from that in April, the National Bureau of Statistics said today. Fixed-asset investment increased 20.1 percent to 10.8 trillion yuan (US$1.7 trillion) in the first five months, almost the same as the growth of 20.2 percent in the first four months.
Retail sales gained 13.8 percent to 1.67 trillion yuan in May, slower from the pace of 14.1 percent a month ago.
The performance was largely in line with earlier market expectation which pointed to signs of stabilization and pin hope on a bottoming-out economy in the current quarter.
"Except the retail sales, industrial production and investment's data came out as we had expected," said Helen Qiao, managing director at Morgan Stanley Research. "They confirmed growth is stabilizing after the downside surprise in April."
But weaker-than-expected retail sales growth indicated a sizable deterioration in domestic demand, said Zhou Hao, an economist at Australia and New Zealand Banking Group.
"It showed requirement for a faster implementation of fiscal policy," Zhou said. "With the announced stimulus measures gradually filtering through, we expect growth momentum in real activities to pick up strongly from this month onward."
Another unexpected spot was the consumer prices, which rose at the slowest pace in 23 months and brushed off concerns of stubborn inflationary pressure.
Consumer Price Index, the main gauge of inflation, expanded 3 percent from a year earlier last month. It compared with the pace of 3.4 percent in April and previous market estimation of 3.2 percent.
Producer Price Index, the factory-gate yardstick of inflation and a harbinger of future consumer prices, dropped 1.4 percent last month, extending the loss stream for a third month and deepening from April's 0.7 percent fall.
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