China Retail August 2020


China: Retail sales return to growth in August

September 15, 2020

Retail sales rose 0.5% compared to the same month of the previous year in August, which contrasted July's 1.1% decrease. The result marked the strongest rise since December 2019 and beat the flat reading expected by market analysts.

On a monthly basis, retail sales grew 1.2% in seasonally-adjusted terms in August, which was better than July’s 0.6% expansion and marked the best result since March 2013. Meanwhile, the trend pointed down, with the annual average variation of retail sales coming in at minus 3.2% in August, down from July's minus 2.6%.

The rebound in retails sales reflected the underlying strength of the Chinese economy. In this regard, Iris Pang, chief economist for Greater China at ING, noted that:

“Since the introduction of cross-provincial travel within China, we have seen retail sales recovering strongly to 0.5%YoY growth in August from -1.1%YoY a month ago. Spending on cosmetics and jewellery rose 19.0%YoY and 15.3%YoY, respectively in August. The tourism business has also brought back jobs in the service sector. The spending power of the population has improved.”

FocusEconomics Consensus Forecast participants expect retail sales to fall 1.4% in 2020, which is down 1.2 percentage points from last month’s estimate. In 2021, the panel foresees retail sales expanding 11.4%.

Author: Ricard Torné, Head of Data Analysis

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China Retail Chart

China Retail August 20 20

Note: Month-on-month changes of seasonally adjusted nominal retail sales index and year-on-year variation in %. Owing to seasonal factors related to the Lunar New Year, annual figures for January and February are reported together.
Source: National Bureau of Statistics of China (NBS) and FocusEconomics calculations.

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