On Friday, China released data indicating retail sales and industrial production in September exceeded expectations. According to the National Bureau of Statistics, retail sales increased by 3.2% compared to the previous year, surpassing the 2.5% growth forecasted by analysts in an LSEG poll. This growth rate also marked an improvement from the 2.1% seen in the prior month.
In addition, industrial production rose by 5.4% over the same period, outperforming the anticipated 4.5% growth. From January to September, fixed asset investment was reported to have grown by 3.4% year-on-year.
China also disclosed an urban unemployment rate of 5.1% for September, which was a decrease of 0.2 percentage points from the previous month.
Despite these positive indicators, Gary Ng, a senior economist at Natixis, expressed caution, noting that data on retail sales throughout the year reflected a cautious consumer sentiment. Between January and September, retail sales grew by 3.35%, closely aligning with the 3.36% growth reported from January to August.
These statistics follow a series of announcements by authorities aiming to stimulate consumption and bolster the struggling real estate sector. Additionally, China recently reported slightly better-than-expected gross domestic product figures.
Investors have been anticipating stimulus measures as economic growth in China, the world’s second-largest economy, remains sluggish amid efforts to recover from COVID-19 lockdowns. Market volatility has been notable as investors evaluate the announcements and await further clarification on their implementation.
Gary Ng emphasized that the magnitude of interest rate cuts and fiscal policies will be crucial for economic recovery and boosting confidence.
