China retail sales stall in April as economic momentum weakens

Monday 18 May 2026 - 07:01

By: Dakir Madiha

China retail sales stall in April as economic momentum weakens

China’s economy lost significant momentum in April as consumer spending nearly stalled and major industrial indicators missed expectations, reinforcing concerns over weakening domestic demand and rising economic pressure. Official data released Monday showed retail sales rose just 0.2% year on year, the weakest pace since late 2022.

The slowdown marked a sharp decline from March, when retail sales increased 1.7%. The result also fell well below market expectations of 2%. Industrial production expanded 4.1% from a year earlier, slowing from 5.7% in March and missing forecasts of 5.9%. Fixed asset investment contracted 1.6% during the January to April period after posting 1.7% growth in the first quarter.

The weaker figures reversed much of the momentum recorded earlier this year. China’s economy grew 5% in the first quarter, supported largely by export activity and factory output. Industrial production had risen 6.1% during that period, helped by external demand and manufacturing activity tied to overseas markets.

Economists said the April slowdown reflected mounting pressure from weak household consumption and higher energy costs linked to the conflict in Iran. Producer prices returned to positive territory in March for the first time in more than three years as fuel costs climbed, squeezing manufacturers’ profit margins while failing to revive consumer spending.

China’s automobile sector showed the extent of the demand weakness. Domestic passenger car sales dropped 21.6% in April from a year earlier to around 1.6 million vehicles. The decline marked the seventh consecutive month of falling sales. Vehicles powered by internal combustion engines recorded the steepest contraction, falling more than 32%, while sales of new energy vehicles also declined nearly 7%.

The data increases pressure on Beijing as policymakers attempt to maintain annual growth near the government’s target of around 5% without launching large-scale stimulus measures. Analysts have warned that China’s uneven recovery is becoming more entrenched, with export-oriented manufacturing outperforming weak domestic consumption.

The prolonged property downturn continues to weigh on household confidence and investment appetite despite signs of stabilization in some major cities. Total retail sales during the first four months of the year rose only 1.9% to 16.49 trillion yuan. Service retail sales performed better, increasing 5.6%, suggesting consumers are prioritizing services and experiences over physical goods.