Growth in China’s investment and factory output missed forecasts in August, pointing to a further cooling in the world’s second-largest economy that will likely prompt the government to roll out more support measures.
The downbeat data came on the heels of weak trade and inflation readings, raising the chances that third-quarter economic growth may dip below 7 percent for the first time since the global crisis.
Fears of a China-led global economic slowdown have roiled global markets in recent weeks, prompting speculation that the U.S. central bank may hold off on raising interest rates later this week.
“The pace of slowdown in fixed-asset investment is relatively fast – dragged by the property sector, while the factory sector remains sluggish,” said Zhou Hao, senior economist at Commerzbank AG in Singapore.
“Overall, the economy is very weak and the central bank may have to continue cutting interest rates and banks’ reserve requirement,” Zhou said, adding he expected growth was very likely to dip below 7 percent in the July-September quarter.
Some economists believe current growth is already much weaker than official data suggest.
August power output, for example, was up just 1 percent year-on-year, and production of key industrial commodities such as steel and coal weakened.
Growth in China’s fixed-asset investment, one of the crucial drivers of the economy, slowed to 10.9 percent in the first eight months of 2015 – the weakest pace in nearly 15 years, data from the National Bureau of Statistics showed on Sunday.
Analysts polled by Reuters had forecast an 11.1 percent rise, compared with 11.2 percent in January-July.
Factory output also was weaker than expected, rising 6.1 percent in August from a year earlier. Markets had expected a 6.4 percent increase, compared with July’s 6.0 percent.
Source : Reuters
