China's Economy Slumps as April 2026 Retail Sales Slow Down

BEIJING — China’s economy began to lose momentum in April 2026 as growth in consumption, industrial output, and investment failed to meet market expectations. This slowdown occurs as the impact of the Iran war continues to weigh on the recovery momentum of the world’s second-largest economy.

Data released by China’s National Bureau of Statistics on Monday (17/05/2026) shows that retail sales grew by only 0.2 per cent in April compared to the same period last year. According to CNBC, this figure is far below economists’ projections, which anticipated a 2 per cent increase, and represents a sharp deceleration from the 1.7 per cent growth recorded in March.

Meanwhile, China’s industrial production grew by 4.1 per cent year-on-year in April, slowing down from the 5.7 per cent growth seen in March and falling below Reuters survey expectations, which had predicted a 5.9 per cent increase.

Urban fixed-asset investment, including the property and infrastructure sectors, contracted by 1.6 per cent in the first four months of 2026 compared to the same period last year. This occurred despite previous market forecasts predicting a growth of 1.6 per cent. During the January-March 2026 period, urban investment had still grown by 1.7 per cent.

The decline in investment was primarily driven by the weakening property sector. Property investment plummeted by 13.7 per cent up to April 2026, a deeper decline than the 11.2 per cent drop seen in the first three months of the year.

In contrast, investment in the infrastructure and manufacturing sectors continued to grow by 4.3 per cent and 1.2 per cent, respectively, during the first four months of the year.

“Property investment in China has now been almost halved compared to its peak in 2021,” said Lizzi Lee, an analyst at the Centre for China Analysis. According to Lee, the ongoing decline in house prices could further worsen household balance sheets. The weakness in the property sector has also triggered large-scale job losses in the construction and related industries.