GROWTH in China’s investment and factory output missed forecasts in August, pointing to a further cooling in the country that will likely prompt the government to roll out more support measures.

    The downbeat data came on the heels of weak trade and inflation readings, raising the chances that third-quarter economic growth may dip below 7 percent for the first time since the global crisis.

    “The pace of slowdown in fixed-asset investment is relatively fast — dragged by the property sector, while the factory sector remains sluggish,” said Zhou Hao, senior economist at Commerzbank AG in Singapore.

    “Overall, the economy is very weak and the central bank may have to continue cutting interest rates and banks’ reserve requirement,” Zhou said, adding he expected growth was very likely to dip below 7 percent in the July-September quarter.

    Some economists believe current growth is already much weaker than official data suggest. August power output, for example, was up just 1 percent year on year.

    Growth in China’s fixed-asset investment, one of the crucial drivers of the economy, slowed to 10.9 percent in the first eight months of 2015 from the same period a year earlier, compared with 11.2 percent in January-July, data from the National Bureau of Statistics showed yesterday.

    Factory output also was weaker than expected, rising 6.1 percent in August from a year earlier. Markets had expected a 6.4 percent increase, compared with July’s 6.0 percent.

    Retail sales were the lone positive surprise, growing 10.8 percent in August from a year earlier, above forecasts of 10.5 percent, the same as July.

    But the increase did not appear to jibe with recent reports from local and foreign firms in China of slowing sales.

    Data last week showed that China’s manufacturers slashed prices at the fastest rate in six years in August as commodity prices fell and demand cooled, signaling stubborn deflationary risks in the economy and adding to expectations for further stimulus measures.

    Imports tumbled more than expected while exports shrank again, pointing to persistently weak demand both at home and abroad.

    China’s central bank has cut interest rate five times since November and repeatedly relaxed banks’ reserve requirements (RRR) in a bid to put a floor beneath the sputtering economy.

    Further policy easing is widely expected in coming months, and the government is also trying to boost investment in infrastructure projects to support growth.

    The government is aiming for annual economic growth of around 7 percent this year, which would be the slowest in half a quarter century.

    (SD-Agencies)