China's weak domestic demand drags growth as consumption and factory output slow

DBS Group Research economists note that while China's external trade remains robust—with exports rising 14.1% year‑on‑year in April and imports up 25.3%—domestic demand is markedly subdued. Consumption, investment, and credit growth all stayed weak in April, and Fixed Asset Investment contracted, especially in the property sector. Inflation pressures are mixed, with producer prices picking up while consumer price growth lags.

Separately, official data show that April’s consumer spending and factory output grew at their slowest pace in years, underscoring the challenges Beijing faces in revitalising the economy. In response, DBS expects no cuts to the one‑year loan prime rate for the next 18 months and anticipates that policymakers will shift support toward fiscal measures rather than monetary easing.