China reported downbeat consumption and investment figures, bolstering economists’ calls for fiscal stimulus to drive growth in the world’s second-biggest economy. Overall retail sales grew less than expected, while fixed-asset investment declined more than the year-to-date average; the country is already grappling with its slowest non-COVID growth in decades, persistently high youth unemployment, and a mountain of debt.
“China’s widening economic divergence is forcing Chinese policymakers into a corner,” Commerzbank said in a note to clients. “With consumption, investment, credit, and the property sector all underperforming, the case for additional targeted measures is building.” Authorities have shown little interest in such fiscal stimulus, however, insisting instead that a long-term shift to high-tech sectors will power the economy.
