China exceeded expectations in its retail sales for May, with a 3.7% increase compared to the same period last year, surpassing the 3% rise predicted by a Reuters poll. On the flip side, industrial output and fixed asset investment figures failed to meet forecasts.
While industrial output saw a year-on-year growth of 5.6%, falling short of the projected 6% increase, fixed asset investment recorded a 4% rise from last May, slightly below the 4.2% forecasted by Reuters.
Despite this, China’s exports showed resilience, growing by 7.6% year-on-year in May in U.S. dollar terms, surpassing Reuters’ forecast of a 6% increase. However, the rise of 1.8% in import figures missed expectations.
Loan data released indicated weak demand with outstanding yuan loans increasing by 9.3% in May year-on-year, the slowest rise since 1978. Additionally, M1 money supply, which encompasses cash in circulation and demand deposits, dropped by 4.2% year-on-year in May, marking the most significant decline since 1986.
Notably, Goldman Sachs analysts highlighted that a state media outlet linked to China’s central bank attributed the slowdown in M1 growth to a crackdown on fake loans and outflows tied to wealth management products.
Inflation data for May revealed that consumer prices, excluding food and energy, rose by 0.6% from a year earlier.
