China keeps loan prime rate unchanged as economic recovery remains uncertain

March 20, 2024 12:30 PM AEDT | By Investing

China keeps loan prime rate unchanged as economic recovery remains uncertain

Economic uncertainty persists amid mixed data

Stronger-than-expected industrial production data released earlier this week spurred some hopes that resilience in China’s biggest economic drivers will help spur a recovery this year.

Fixed asset investment also grew more than expected in the first two months of 2024, while signs of increased consumer spending and travel demand during the Lunar New Year holiday pushed up hopes for a recovery in consumption.

But retail sales data for January and February missed expectations, despite a boost from holiday spending.

China’s unemployment rate also unexpectedly rose in the first two months of the year, indicating that cracks in some aspects of the economy were deepening.

The property market, which was walloped by weakening sales and a series of high-profile defaults over the past three years, remained a key pain point for the Chinese economy.

Any further reductions in the LPR are likely to be spurred by worsening conditions in the property sector.

This article first appeared in Investing.com

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