BEIJING: Growth in China’s retail sales and industrial production slowed in July, official data showed Monday, with a rebound of Covid-19 dragging on demand while recent floods disrupted businesses.

The world’s second-largest economy staged a rapid recovery from last year’s coronavirus outbreak, beating back the virus with mass testing and strict lockdowns.

But a flare-up across the country due to the Delta variant has threatened the good news on growth with renewed localised lockdowns and extensive travel restrictions.

Retail sales rose 8.5 percent on-year in July, the National Bureau of Statistics said on Monday, below a Bloomberg consensus forecast of analysts.

This figure was also below 12.1 percent growth in June, likely reflecting the virus resurgence in dozens of places last month, according to analysts.

“The spread of domestic outbreaks and natural disasters have affected the economy of some regions, and economic recovery remains unstable and uneven,” NBS spokesman Fu Linghui told a press briefing on Monday.

But he added that “the national economy continues to stabilise and recover” overall.

Industrial production rose 6.4 percent in July, easing as well from the month prior, the NBS said.

China’s urban unemployment rate, meanwhile, ticked up to 5.1 percent.

Iris Pang, ING’s chief economist for Greater China, told AFP industrial output was weak “because of the semiconductor chip shortage that has affected production”.

A shortage of chips has been sending shock waves through the global economy, squeezing supplies of everything from cars to headphones.

“There were also reports of production lines being halted as workers were unable to travel to factories,” he said.