According to the research report released by ICBC International, the retail performance in China in May exceeded expectations, and the total retail sales of consumer goods increased by 3.7%; the value added of the industry increased by 5.6%, which was lower than expected. The May data showed that the economy is still in a mild recovery, and it is expected that the growth-supporting policy will continue during the year.

The report states that although industrial production has unexpectedly slowed down, it is expected that future industrial output will continue to maintain steady growth with the support of industrial upgrading and overseas demand recovery. Thanks to the strong offline consumption and the policy of trading in old products for new ones, the social retail performance is better than expected, showing the resilience of consumption.

The bank predicts that the growth-supporting policy will continue during the year. The 25 basis point reduction in the deposit reserve ratio in June is still the benchmark forecast, but it may be postponed to the third quarter. At present, the probability of interest rate cuts is relatively small.