COVID’s Delta variant and extreme weather have been hitting the economy for the past month, but their effects will be temporary. Industrial output was up 6.4% y/y in July, and up 11.5% from July 2019, with an annualized growth rate of 5.6% y/y, down 1 ppts from Q2 2021. Investment was up 10.3% y/y, and up 8.5% from July 2019, with annualized growth of 4.2%, down 0.3 ppts from H1 2021, hitting its lowest growth rate since 1990.
Consumption and trade have both slowed too. Retail sales of social consumption goods were up 8.5% y/y in July, and up 7.2% from July 2019, with an annualized growth rate of 3.6% y/y, down 1 ppts from Q2 2021. Exports rose 8.1% y/y, down 12 ppts from Q2, while imports rose 16.1% y/y, down 14.5 ppts.
Producer prices have continued their rapid growth. In particular, the ex-factory price index of industrial goods and PPI rose 0.5% and 0.9% m/m respectively, and rose 9% and 13.1% y/y, comparable to June. CPI rose mildly, and increased 1% y/y in July, slightly less than in May and June. We expect CPI to rise to around 2% by yearend.
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