China’s economic activity is estimated to have slowed down in November, weighed by the worsening crisis in the property sector and subdued consumption, analysts said in a survey by Bloomberg. According to them, fixed-asset investment probably grew at a slower pace last month due to sluggish property investment. Investors will closely monitor home sales during the peak season toward the end of the year. Weak sales would worsen the already grave financial position of many developers.
The ongoing economic slowdown has led to a change in Beijing’s policy direction in December. The People’s Bank of China has started easing monetary policy, while the Communist Party has called for more fiscal spending next year. However, it remained unclear whether that support would be sufficient to cushion the shocks of the crackdown on the property market.
Economists expect China’s infrastructure investment growth to have accelerated from 1% in the first ten months of the year, driven by a boost in the sale of special bonds by local governments. That boost is likely to continue into next year, with the central government allowing provinces to start offering next year’s bonds from January 1 to accelerate spending. However, local governments are warned of long-term consequences from taking on more hidden debt.
Retail sales may have decelerated to 4.7% in November, from 4.9% in October, according to the survey. Industrial output is expected to rise on robust export demand. The surveyed unemployment rate was likely to be steady at 4.9%, around the pre-pandemic levels.
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Published on December 14, 2021 9:43 AM (GMT+8)Last Updated on December 14, 2021 9:43 AM (GMT+8)
