The growth of China’s economy slowed down in August because of the new outbreak of the “Delta” -Shtamma coronavirus and tough Chinese government measures. Reports about it Bloomberg.
Pandemic hit retail sales, the growth of which slowed down to 2.5 percent compared to last year, which was lower than the expectations of economists for seven percent. The reason was the reduction of costs in the summer. Industrial production increased by 5.3 percent compared with 5.8 percent expectations.
Investments in construction decreased by 3.2 percent in eight months, since the government tightened restrictions on the acquisition of property in order to keep the rise in housing prices and prevent speculation on the market, Reuters reports. The construction pace slowed down, so the production of steel in the country reached a 17-month low in August. In addition, because of China, the global demand for iron ore has decreased.
“The markets have yet significantly underestimated the growth of growth in the second half of the year,” said Chief Economist in China in Nomura Holdings in Hong Kong Lu Ting. People’s Bank of China (NBK) refused to take measures to accelerate economic growth. The monetary policy of the country will remain the same: China will not introduce large-scale incentives to help their own markets. Instead, the government will increase target support programs for small businesses.
As the head of the NBK Monetary Policy Department of the NBK Sun Gofen, current economic conditions do not require such a large amount of liquidity, which was necessary during the peak of the pandemic. Many economists expect the NBK to reduce the norm of mandatory reserves in the coming months, which has already done in July.