China industrial production beat expectations last month, though its boost from favorable comparisons to a Covid-hit period in 2022 means that result is unlikely to quell concerns about growth next year.
Industrial output rose 6.6% last month from a year earlier, the National Bureau of Statistics said Friday, versus a median estimate for a 5.7% increase. Retail sales expanded 10.1%, slower than a projected 12.5% jump.
Growth in fixed-asset investment was 2.9% in the first 11 months of the year, versus a forecast 3% gain. Investment in property development remained a serious drag, plunging 9.4% in the period.
The urban jobless rate was unchanged at 5%.
Economists are handling November’s data with care due to distortions from last year. Policymakers are under pressure to ramp up supportive measures for the economy, as the real estate crisis remains a major threat to China’s recovery and deflation lingers, pointing to stubbornly weak domestic demand.
The People’s Bank of China kept the rate on its one-year policy loan at 2.5% on Friday before the NBS release, but injected the most cash via its medium-term lending facility since records began in 2014.
At two recent conclaves on economic policy for next year, top leaders emphasized they will seek “progress” and strengthen fiscal policy “appropriately.” That fueled expectations they may set an ambitious growth target and expand the official budget deficit significantly again.
Many analysts anticipate the government will set the 2024 growth target at a similar level to this year’s around 5%. That will be more aspirational due to this year’s higher base.
Authorities also vowed to keep credit growth in step with both economic growth and inflation targets, a sign of official concern on falling prices. Monetary easing may be on the cards next year although aggressive steps are unlikely, with economist expecting measured interest rate cuts and reductions in the amount of cash banks must keep in reserve.
Source : Bloomberg
