China’s Central Bank Retains Interest Rate
According to a Reuters poll, the People’s Bank of China maintained its 1-year and 5-year lending prime rates at 3% and 3.5%, respectively, for a seventh consecutive meeting.
While the 5-year helps set mortgage rates, the 1-year rate serves as a standard for new loans.
China’s November economic data, which included lower-than-expected retail sales and industrial output, coincided with the PBOC’s decision.
Retail sales increased by 1.3% last month compared to a year ago, falling short of Reuters’ median projection of 2.8% growth and declining from the previous month’s 2.9% increase.
Additionally, industrial production fell short of projections, increasing 4.8% in November from the same month last year as opposed to projections of a 5% increase. This was the smallest rise since August 2024.
Real Estate Still Far From Recovery
China’s real estate market is still suffering from a protracted downturn. Compared to a year before, investment in fixed assets, which includes real estate, decreased by 2.6% between January and November. This decline was more severe than the 2.3% decline that experts had predicted.
November saw a further decrease in new home prices, indicating the ongoing deterioration in China’s real estate market.
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Retail sales increased by 1.3% last month compared to a year ago, falling short of Reuters’ median projection of 2.8% growth and declining from the previous month’s 2.9% increase.
Additionally, industrial production fell short of projections, increasing 4.8% in November from the same month last year, as opposed to projections of a 5% increase. This was the smallest rise since August 2024.
China’s real estate market is still suffering from a protracted downturn. Compared to a year before, investment in fixed assets, which includes real estate, decreased by 2.6% between January and November. This decline was more severe than the 2.3% decline that experts had predicted.
November saw a further decrease in new home prices, indicating the ongoing deterioration in China’s real estate market.
