Employees of an equipment manufacturer in Hai'an, East China's Jiangsu Province make large construction equipment to be exported to countries and regions along the routes of the Belt and Road Initiative (BRI). Photo: cnsphoto

China on Monday posted weaker-than-expected growth for some key economic indicators for April, shining a spotlight on lackluster recovery of some crucial growth drivers - most notably of the consumer market.

However, the economic juggernaut remains firmly on track for a steady rebound, as consumption is expected to regain momentum in the coming months and solid growth rate of up to 10 percent is expected for the whole year, according to officials and economists.

Retail sales jumped 17.7 percent year-on-year in April, the National Bureau of Statistics (NBS) announced Monday. 

The figure represents a rise of 8.8 percent from 2019 and an average growth of 4.3 percent over the past two years, but it's down sharply from a 34.2-percent surge in March.

Industrial output posted a 9.8-percent year-on-year gain in April. The April reading went up 14.1 percent from its equivalent in 2019, but it faded from a 14.1-percent rally in March.

Urban fixed-asset investment rose 19.9 percent year-on-year in the first four months, per NBS data, moderating from a 25.6-percent gain over the first three months.

The economic indicators for last month showed a conspicuous moderation in growth, falling short of market estimates. 

The growth moderation in April was attributed to a relatively higher base last April when the economy began emerging from the coronavirus fallout, Bank of Communications economists Tang Jianwei and Liu Xuezhi wrote in a research note sent to the Global Times on Monday.

Additionally, some economic indicators, especially the gauges for the services sector and the consumer market, posted weak growth, they said.

Certain sectors that took a battering from the epidemic are seeing signs of a ramped-up recovery, according to the economists, who cited the hotel, catering, cultural, sports and entertainment, rail transport and air service sectors.

Momentum appears to be waning in the overall services sector, they said, citing an index measuring national services production that gained 18.2 percent year-on-year in April but edged down 0.6 percentage points from March.

Lackluster consumption growth was also in focus. The consumption rebound, weaker than the recovery in factory activity and investment, indicates the consumer market has yet to regain its pre-virus levels, observers said.

Data from the Bank of Communications showed that excluding swings in the base readings, consumption growth for April was on average down 2 percentage points from March over the previous two years. 

Prior to Monday's announcement, the April credit data was also worse than expected, with M2 money supply growing 8.1 percent year-on-year in April, easing from a gain of 9.4 percent in March and down 3 percentage points from the reading for last April.

However, signs of a slowdown over the past month don't dent the prospects for an economic rebound in coming months.

Raw materials prices are eroding businesses' earnings, curbing wage hikes and thus denting consumer spending, said Luo Huanjie, a senior researcher at the Zhixin Investment Research Institute. But there are a few silver linings, including a continued rise in catering revenues.

Consumption growth is anticipated to regain momentum with an across-the-board rebound in the domestic tourism market as seen over the May Day holidays, according to Luo, and various pro-consumption activities will release pent-up demand.

A month-long national campaign to rev up consumption was launched in Shanghai on May 1, with a series of promotional activities planned across the country.

A series of favorable factors will enable the stable growth of consumption for the rest of the year, Fu Linghui, spokesperson for the NBS, said at a press briefing in Beijing while announcing the April indicators. 

He said the contribution of consumption to economic growth will continue to increase, along with improved consumer expectations.

The economic recovery remains in good shape, according to the spokesperson, because of a stable job market and mild consumer inflation, among other factors. 

The NBS spokesperson also warned about uncertainties when it comes to the global pandemic and the outlook for a world economic recovery. The unbalanced rebound in the domestic economy was also a source of concern, the spokesperson said, calling for the implementation of macro policies in a scientific and precise manner to ensure the economy's steady operation at a reasonable range.

Overall, the economic outlook for the second quarter is positive, with the month-on-month growth trend expected to continue, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Monday.

He forecast that the country's GDP growth for the second quarter would reach 6-10 percent year-on-year.

The economy recorded an 18.3-percent expansion in the first quarter, its fastest in three decades, according to official data.