China’s economic activity continued to weaken in August as the country tried to stem the resurgence of the Covid-19 outbreak by implementing tighter sanctions measures.
Retail sales fell sharply to 2.5% from 8.5% last month and were far off from expectations to rise 7.0%, recording the slowest growth since August last year.
China’s economy made a very strong recovery from a coronavirus-induced contraction last year, but growth momentum has slowed in recent months as businesses struggle with the re-emergence of Covid-19 and supply chain disruptions due to high raw material costs.
The implementation of movement restriction measures in some provinces has affected the catering, transportation, accommodation and entertainment industries.
Moreover, factory output growth in China also recorded a slower growth with an increase of 5.3% in August from 6.4% recorded previously, the weakest rate since July 2020.
This weakness is driven by persistent semiconductor shortages and measures to control high pollution, with slow production for both manufacturing and utilities.
Following this lackluster reading, the risk -sensitive Aussie dollar continued to weaken to a two -week low.
The kiwi dollar slumped to a one -week low, before stabilizing around 0.7097 against the USD.
