Industrial production and retail sales of China grew more than expected in October, despite new restrictions to control the Covid-19 outbreaks and supply problems.
Production grew 3.5% in October compared to the same period last year, official data showed on Monday, accelerating from a 3.1% increase in September. Retail sales growth also increased.
The increase beat expectations for a 3% annual growth in a Reuters analyst poll, but it was still the second-lowest reading this year.
The world’s second-largest economy has made an impressive recovery since last year’s pandemic crisis, but has since lost momentum as it grappled with a slowdown in the manufacturing sector, debt problems in the housing market and Covid-19 outbreaks.
Data from the National Bureau of Statistics (NBS) also showed that retail sales accelerated, even as new restrictions were imposed to fight a new wave of Covid-19 cases in the north of the country.
Retail sales increased 4.9% year-on-year in October, beating expectations for a 3.5% growth and after a 4.4% increase in September.
On the other hand, the slowdown in the real estate sector weighed on economic prospects.
“Growth will likely weaken for the rest of this year,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
“The Covid outbreak has forced more cities to tighten travel restrictions, which will likely affect the service sector adversely in November. The downturn in the real estate sector is getting worse,” Zhang said, adding that this is “the main risk to the macro outlook in the coming quarters.”
NBS data showed that real estate investment and sales growth continued to decelerate throughout January-October compared to the first nine months of the year, and new construction starts declined.
Confidence in the real estate market of China was shaken by the deepening debt crisis, with the real estate giant China Evergrande and the Kaisa Group battling impending defaults.
Reference: CNN Brasil