China’s central bank has taken the step of lowering interest rates in response to recent data indicating a weakening in consumer spending and factory output. This move comes as the country strives to stimulate growth in its second largest economy, which has been struggling to recover from the effects of the Covid-19 pandemic.
Interestingly, alongside the disappointing data, the National Bureau of Statistics has made the decision to stop reporting youth unemployment figures. These figures had been steadily rising throughout the year, exceeding 20%. Additionally, the release of a consumer confidence report earlier in the year was also halted. This decision raises concerns over the severity of the situation.
On Tuesday, China’s central bank made key interest rate cuts for one-year loans and one-week borrowing. This decision was influenced by a report revealing a negative inflation rate in July. Furthermore, data released on Tuesday indicated that retail sales and industrial production growth in July fell short of expectations.
Given the challenges posed by various economic factors, it is expected that further measures will be taken to restore China’s economy to a steady trajectory. The stakes are high for the government, as it is likely to miss its target of 5% economic growth this year, already set at a historic low.
