A busy week lies ahead for China, headlined by a slew of May economic data releases that will offer fresh insight into how the world's second-largest economy is faring amid a prolonged conflict in the Middle East.
The data, including industrial production, retail sales and fixed-asset investment, are expected to indicate overall improvement and signal economic resilience despite macro headwinds.
Amid a continuing export boom, DBS economists forecast China's industrial production growth to jump to 4.6% on year in May, up from 4.1% in April, thanks to strong external demand for AI-related electronics. The improvement should align with the latest high-tech manufacturing and equipment manufacturing PMI readings, which both strengthened last month.
Meanwhile, ANZ expects retail sales growth to pick up to 1.0% in May, up from 0.2% in the previous month on an improvement largely from an extended Labor Day holiday. Analysts broadly agree that domestic consumption remains subdued, with DBS economists highlighting weak household sentiment continuing to weigh on spending amid uncertain employment prospects, slower income growth and elevated precautionary savings.
May fixed-asset investment readings will also be closely watched. DBS expects year-to-date investment to contract 2.0% in May from a year earlier, as companies continue to navigate the government's ongoing crackdown on overcapacity and aggressive price competition.
