The Strategist

China's economic growth slows down amid COVID-19 outbreaks and floods

08/16/2021 - 08:40

China's industrial production and retail sales growth slowed sharply and fell short of expectations in July. The economy and business were hampered by new COVID-19 outbreaks and floods.

Industrial production in China rose 6.4 percent year on year in July and retail sales rose 8.5 percent. This was reported by China's National Bureau of Statistics. Both figures were less than expected and June's growth, Reuters reported. 

An official of the statistics bureau said at a briefing Monday, Aug. 16, that China's recovery remains uneven due to COVID-19 outbreaks and natural disasters. 

Industrial production in the world's second-largest economy rose 6.4% year on year in July, against expectations of a 7.8% increase and after rising 8.3% in June. Retail sales rose 8.5% last month, well below the 11.5% growth forecast and 12.1% growth in June.

China's steel production fell in July to its lowest monthly level since April 2020 as authorities tightened production controls. A growing number of analysts are cutting their estimates of China's economic growth in the third quarter against this backdrop. 

The country's gross domestic product (GDP) grew 7.9 percent in April-June from a year earlier. In July, the People's Bank of China cut the amount of cash banks must hold in reserves, and many analysts expect another cut later this year to support growth amid signs of mounting pressure on the economy.