China’s industrial production growth likely slowed further in May

In April, China’s industrial production came below expectations, growing only 6.5 percent on a year-on-year basis, falling from March’s 7.6 percent. The deceleration in production was because of weakness in overseas demand and domestic consumption. Electricity production slowed notably on the month hinting that most of the softness in industrial production was concentrated in manufacturing output. But the production of glass, steel and cement performed better. According to consensus expectations, industrial production growth is likely to have slowed further to 6.4 percent year-on-year in May.

The data for retail sales and fixed asset investment are also set to be released this week. In April, retail sales growth had eased in April, as muted domestic demand restricted sales. Fixed investment growth continues to be a shadow of its earlier self. The recent softness seen in all the three figures implies that the Chinese economic growth more than likely decelerated in the second quarter, stated Wells Fargo in a research report.