- In recent weeks, policymakers have announced increased economic support, primarily to struggling local governments.
- The International Monetary Fund last week cited Beijing’s policy announcements as the reason for raising its growth forecast for this year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.
Chongqing, China – November 5, 2023 – High-rise buildings are seen in downtown Chongqing, China, on November 5, 2023. (Photo: Costfoto/NurPhoto via Getty Images)
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BEIJING – China on Wednesday announced retail sales and industrial data for October that beat expectations, while the decline in real estate worsened.
Retail sales rose 7.6% last month from a year earlier, beating expectations for a 7% rise in a Reuters poll.
Industrial production rose 4.6% in October from a year earlier, beating the 4.4% pace expected in a Reuters poll.
Fixed asset investment in the first 10 months of this year increased by 2.9% from the previous year, falling short of the expected 3.1% increase.
Investments in real estate fell by 9.3% during the period, a sharper decline than the 9.1% decline reported in the first nine months of this year.
According to the National Bureau of Statistics, the unemployment rate in urban areas was 5%. That hasn’t changed since September. The bureau has stopped reporting youth unemployment rates since the summer.
According to the data, among retail sales, sales of sports and other leisure and entertainment products increased by 25.7% in October compared to the same month last year.
In addition to catering, sales of alcohol and tobacco also increased by double digits. Automotive-related sales increased by 11.4% from the previous year.
The first week of October marked the last major holiday of the year, known as Golden Week in China. Domestic tourism spending has recovered to almost 2019 levels, according to official data, but this is partly due to more people staying in the country as international travel has not yet fully returned to pre-pandemic levels. Ta.
In recent weeks, policymakers have announced increased economic support, primarily to struggling local governments. The Chinese government is also taking steps to stabilize its huge real estate sector, which is expected to become a smaller share of the economy in the long run.
The International Monetary Fund last week cited Beijing’s policy announcements as the reason for raising its growth forecast for this year to 5.4%. The IMF also raised its 2024 growth forecast to 4.6%.
“Pressures remain” when it comes to real estate, IMF First Deputy Managing Director Gita Gopinath told CNBC in an exclusive interview.
“There’s still a lot of stress in the market. There’s still some weakness in the market,” he said. “This is not going to end quickly. It will take some time to get back to a more sustainable scale.”
The real estate and related sectors account for about a quarter of China’s gross domestic product.
Analysts at UBS estimate that share has fallen to about 22% this year. Sales of new homes have declined, and major real estate developers such as Country Garden have defaulted on their debts.