- Commerzbank
China's industrial production, retail sales and investment undershot expectations in April, despite Beijing's aggressive easy-money policies in the first quarter, indicating ongoing weakness in the world's second-biggest economy. Industrial output increased 6.0% year-over-year in April, down from 6.8% growth in March, the National Bureau of Statistics reported, coming in below economists' forecast for a 6.6% gain. In addition to that, retail sales rose by a less-than-predicted 10.1% in April compared with a year earlier, slowing from March's 10.5% year-over-year surge. Fixed-asset investment in urban areas grew by a weaker-than-expected 10.5% year-over-year in the January-to-April period, compared with an annual increase of 10.7% for the first three months of 2016.
Economists do not expect policy makers to ease monetary policy in response to the April data, although another bout of market volatility could alter that. The People's Bank of China said that monetary policy remained unchanged, pledging to keep a "prudent" policy and use flexible tools to ensure adequate liquidity. China's economy continues to combat significant headwinds, including rising debt levels and the economic drag of too many factories pumping out more products than there is demand for. Coal consumption, steel production and exports were weaker in April, while the official and Caixin purchasing managers' indexes came in worse than expected last month.
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