China cuts rates as data shows economic recovery stalling
Fears that China’s economic recover was stalling were strengthened further as the country’s central bank cut its benchmark policy rate for the first time in almost a year amid a raft of disappointing data.
The People’s Bank of China clipped its medium-term lending facility rate to 2.65% from 2.75% in an effort to stimulate the economy towards its growth target of 5%.
Meanwhile, official data showed retail sales and industrial production both came in lower than forecast, rising 12.7% and 3.5% respectively year on year last month but lower than the 18.4% and 5.6% recorded in April. The annual rise was distorted by a low base given Covid lockdowns in the second quarter of 2022.
The much-expected recovery from the Covid pandemic has largely failed to materialise, as the property market struggles and consumers rein in spending.
New construction starts in the first five months of this year fell by almost a quarter year on year.
In a further release, overall unemployment was unchanged at 5.2%, but youth unemployment surged to 20.8% - the highest level since records began in 2018.
Reporting by Frank Prenesti for Sharecast.com