China's Economy Loses Momentum As COVID Curbs Hit Factories, Consumers

• China's economy suffered a broad slowdown in October as factory output grew more slowly than expected and retail sales fell for the first time in five months, underscoring faltering demand at home and abroad.
• The world's second-largest economy is facing a series of headwinds including protracted COVID-19 curbs, global recession risks and a property downturn. In a sign of persistent weakness in the sector, data on Tuesday also showed property investment falling at its fastest pace since early 2020 in October.
• The downbeat data poses a challenge for Chinese policymakers as they steer the $17 trillion dollar economy through choppy waters, following recent moves to ease some COVID curbs and give financial support to the struggling property sector.
• "October activity growth broadly slowed and missed market expectations, pointing to a weak start to Q4 as a worsening COVID situation, prolonged property downturn and slower export growth more than offset continued policy stimulus," analysts at Goldman Sachs said in a note.
• Industrial output rose 5.0% in October from a year earlier, missing expectations for a 5.2% gain in a Reuters poll and slowing from the 6.3% growth seen in September, data from the National Bureau of Statistics (NBS) showed on Tuesday.
• Retail sales, a gauge of consumption, fell for the first time since May, when Shanghai was under a city-wide lockdown. Sales dropped 0.5%, against expectations for a 1.0% rise and compared with a 2.5% gain in September.
• COVID outbreaks widened across the country in October, disrupting the pandemic-sensitive services sector, including the restaurant industry.
• In response to the weak data, investment bank JPMorgan revised down its year-on-year GDP forecast for China in the fourth quarter to 2.7% from a prior 3.4%, while Citi also trimmed to 3.7% from 4.6% previously.

(Source: Reuters)