RTTNews - In a sign that the economy is pulling up from the bottom, China's factory output and retail sales rose more than expected in May along with an increase in new lending.
Data released by the National Bureau of Statistics showed that industrial output rose 8.9% year-on-year in May, quicker than the 7.3% increase recorded in April. Meanwhile, economists had forecast production to grow 7.7%.
Retail sales grew 15.2% annually in May, beating forecasts for 15% growth and faster than the 14.8% increase in April. Urban retail sales grew 15%, while rural sales climbed 15.6%. During the period from January to May, retail sales were up 15%.
On the same day, data released by the People's Bank of China showed that new loans rose to 664.5 billion yuan in May from 318.5 billion yuan a year earlier.
The central bank also said M2, the country's broadest measure of money supply, rose 25.7% year-on-year in May. It follows a record 26% growth in April. The narrow measure of money supply, M1 was up 18.69%.
Today's positive data indicate that the economy is recovering gradually and the 4 trillion yuan government stimulus package is reaping the expected results. The Chinese economy has expanded 6.1% in the first quarter from a year earlier.
The increase in China's leading economic indicators raises hopes for the world economy. The International Monetary Fund reportedly upgraded its global growth outlook for 2010 to 2.4% from 1.9%. It also confirmed a 1.3% contraction for this year.
At the same time, World Bank President Robert Zoellick said Thursday that the global economy will decline this year by close to 3%, a significant revision from a previous estimate of a decline of 1.7%.
Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks, Zoellick said ahead of the Group of Eight finance ministers meeting in Italy.
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