BEIJING (Reuters) – China’s industrial profits swung back to a sharp contraction in August, official data showed on Friday, adding to a recent spate of bleak readings that point to mounting pressure on the economy.
Profits plunged 17.8% in August from a year earlier following a 4.1% increase in July, while earnings rose slower at 0.5% in the first eight months compared with 3.6% in the January-July period, according to the National Bureau of Statistics (NBS).
Sluggish data published earlier this month has exacerbated worries about an anaemic recovery, prompting global brokerages to revise down their 2024 China growth forecasts to below the official target of around 5%.
Highlighting weak domestic demand, a key bottleneck for the economy amid job security anxiety and worsening slumps in property sales and investment, domestic dairy giant Inner Mongolia Yili Industrial Group Co posted a 40% fall in second-quarter net profit.
To pump some much-needed optimism into the economy, China’s central bank announced on Tuesday the most aggressive stimulus since the pandemic, including a 50 basis point cut on banks’ reserve requirements.
But analysts warned more demand-side easing, especially fiscal help, would be vital to restore confidence.
($1 = 7.0565 Chinese yuan)
(Reporting by Qiaoyi Li and Ryan Woo; Editing by Sam Holmes)
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