Less than an hour before the release of another set of disappointing economic data, China’s central bank unexpectedly cut key interest rates, signaling the government wants to accelerate the country’s post-pandemic recovery.
The People’s Bank of China cut its annual rate on medium-term loans by 15 basis points to 2.5%, the deepest cut since 2020. The interest rate on loans to financial institutions was cut by 10 basis points in June and is now at its lowest level since its introduction in 2014. The central bank also cut the short-term interest rate by 10 basis points.
Fatal data from China
China released another round of disappointing economic data on Tuesday. Retail sales, an indicator of consumption, rose 2.5% year-on-year in July, beating the target of 4.5%. according to analysts polled by Reuters. Exports in July amounted to 2.016 trillion yuan, or nearly $278 billion, down 9.2% from the previous year.
More surprisingly, China did not mention youth unemployment statistics in its July report. Youth unemployment rose to a record high of 21.3 percent. in the second quarter of 2023
China does not disclose data
A spokesman for the China Bureau of Statistics told Bloomberg that youth unemployment data will not be released from August until research methods are improved.
In the same communiqué on Tuesday, China’s Bureau of Statistics said that domestic demand remains insufficient and that the foundations for economic recovery need to be further strengthened.
“We must strengthen the role of macroeconomic policy in regulating the economy and make active efforts to stimulate domestic demand, build confidence and prevent risks,” the ministry said.
Source: Wprost
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