China’s Economic Slowdown Deepens, Fresh Stimulus Likely: Report

New Delhi: China’s economy slowed more than anticipated in August, with a sharp decline in investment fueling expectations of additional government stimulus to keep growth aligned with its official target of around 5 per cent, according to a report.

Official data released by the National Bureau of Statistics, cited in the Financial Review, showed that both industrial output and consumption registered their weakest performance of the year.

Factory and mining production rose just 5.2 per cent in August from a year earlier — the smallest gain since August 2024 — compared with 5.7 per cent growth in July. Retail sales, a key measure of consumer demand, increased 3.4 per cent in August, the slowest since November 2024, and down from 3.7 per cent the previous month. Markets had expected a 3.9 per cent rise.

Fixed-asset investment also disappointed, expanding only 0.5 per cent in the first eight months of 2025, compared with 1.6 per cent growth from January to July. This was the weakest performance outside the pandemic years.

Analysts noted that while strong momentum earlier in the year keeps Beijing’s growth target achievable, further policy easing may be required to support activity in the final quarter. Consumer loan subsidies that took effect in September are expected to help, though their impact remains uncertain.

Economists are now anticipating another 10-basis-point rate cut and a 50-basis-point reduction in the Reserve Requirement Ratio (RRR) in the weeks ahead.

Meanwhile, India’s economy has shown a sharp rebound in Q1, aided by tax reforms, GST rationalisation, and policy rate cuts. Analysts forecast over 15 per cent growth in corporate earnings by FY27, which could help revive foreign portfolio investment (FPI) sentiment.

With inputs from IANS