China Investment and Industrial Output Growth Miss Forecasts

China's industrial production and retail sales grew in April but failed to top analysts' forecasts, underscoring sluggish growth momentum in the world's second-biggest economy.

China's industrial production rose to 9.3% year-on-year in April from the 8.9% rise recorded in March, showed data from the National Bureau of Statistics. This compares with analysts' expectation of 9.4% rise.

Retail sales inched up 12.8% annually in April, which was in line with the forecasts and is against the 12.6% rise recorded in March.

Meanwhile, urban fixed asset investment, a measure of construction and infrastructure spending, rose to 20.6% in the first four months of the year compared with the prediction of 21% growth. Investments were up 20.9% in the first quarter.

The data failed to cheer the Chinese markets as Shanghai Composite Index lost nearly 0.2% in the afternoon trade.

Earlier, data showed that consumer price inflation rose to 2.4% in April, still hovering below the government target of 3.5%, while producer prices fell for the 14<sup>th consecutive month.

Food prices rose 4% on an annual basis in April, compared to a 2.7% rise in March, while producer prices declined by 2.6% in the month, compared to a 1.9% decline in March due to a pullback in raw material prices.

Inflation is expected to rise further on increased consumer demand amid a slow economic recovery and the central bank is likely to go for a rate cut given the tepid growth.

The subdued data across the board has prompted analysts to lower their estimates for China's growth this year to the range of 7.6% to 7.8%.