China’s economy witnessed an unexpected slowdown in July. Much of the slowdown came following a fall in factory and retail activity due to Beijing’s zero-Covid policy and a property crisis.
China’s central bank also surprised markets by cutting key lending rates to revive demand, according to the Guardian.
July’s industrial output grew by 3.8 percent from a year earlier, data from the National Bureau of Statistics has shown.
The growth was comparatively lower than the 3.9 percent witnessed in June.
Retail sales also missed its key five percent growth target on just 2.7 percent.
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The news comes while the world’s second-largest economy narrowly escaped contraction in the June quarter.
Pressure mounted on China’s economy following a lockdown in the commercial hub of Shanghai and a downturn in the property market.
The property sector, which suffered a setback when China witnessed a mortgage boycott, deteriorated in July when investment tumbled 12.3 percent.
The NBS warned: “The risk of stagflation in the world economy is rising, and the foundation for domestic economic recovery is not yet solid.”
Wang said: “We are now facing a typical liquidity trap problem.
“No matter how loose the credit supply is, companies and consumers are cautious in taking on more debt.”