New Delhi: China’s economy slowed more than expected last month as a slump in investment raised hopes of new government stimulus to keep growth on track with its 5 percent annual target.
Official data show industrial output rose just 5.2 percent year-on-year in August, the smallest gain since August 2024 and down from 5.7 percent in July. Retail sales, a key measure of consumption, grew 3.4 percent, the weakest pace since November 2024, cooling from 3.7 percent a month earlier and missing forecasts of 3.9 percent.
Fixed-asset investment also disappointed, rising only 0.5 percent in the January–August period versus 1.6 percent in the first seven months — its worst performance outside the pandemic. Analysts say manufacturers are waiting for clarity on a U.S. trade deal while domestic demand remains hampered by a volatile job market and a property slump.
Despite the weak data, a strong start to 2025 means China’s growth target is still within reach. However, economists expect further policy support — including a possible 10-bps interest rate cut and a 50-bps reserve-requirement ratio reduction in the coming weeks — to shore up momentum.
Meanwhile, India’s economy is rebounding strongly. Tax cuts, rate reductions by the MPC and GST rationalisation are expected to sustain growth momentum, while analysts project corporate earnings to rise over 15% in FY27, potentially triggering a turnaround in foreign portfolio investor sentiment.