China: Retail sales pick up in January–February
Retail sales rose 3.5% year on year in January–February (December: -1.8% yoy). Catering services performed particularly well, with consumers returning to restaurants as the Covid-19 wave subsided and restrictions were lifted. However, auto sales fell sharply due to the expiration of a tax cut on vehicles, dragging down the headline reading.
On a seasonally adjusted monthly basis, retail sales were flat in February (January: +0.6% mom).
Commenting on recent data releases as a whole, Nomura analysts said:
“January-February activity data show improvement across the board from Q4 2022, and pent-up demand was released in areas such as catering. However, due to shrinking exports and the still-weak property sector, the recovery pace has not been very strong, which lends support to Beijing’s conservative ‘around 5%’ GDP growth target for 2023. We expect these major activity data to improve further in March.”