China’s economy stumbled in May with industrial output and retail sales growth missing forecasts, adding to expectations that Beijing will need to do more to shore up a shaky post-pandemic recovery. The economic rebound seen earlier this year has lost momentum in the second quarter, prompting China’s central bank this week to cut some key interest rates, with expectations of more to come. Industrial output grew 3.5% in May from a year earlier, the National Bureau of Statistics said on Thursday, slower than the 5.6% expansion in April and slightly below a 3.6% increase expected by analysts in a Reuters poll, as manufacturers struggle with weak demand at home and abroad. Retail sales – a key gauge of consumer confidence – rose 12.7%, missing forecasts of 13.6% growth and slowing from April’s 18.4%. “All the data points so far sent consistent signals that the economic momentum is weakening,” said Zhiwei Zhang, president of Pinpoint Asset Management. Data ranging from factory surveys and trade to loan growth and home sales have shown signs of weakness for the world’s second-biggest economy. The soft run of data has defied analyst expectations for a sharper pickup, given comparisons with last year’s very weak performance, when many cities were under strict COVID lockdowns. The figures also reinforce the case for more stimulus as policymakers face deflationary risks, mounting local government debts, record youth unemployment and weakening global demand. “Insufficient domestic demand and sluggish external demand could interrupt the momentum in the ongoing months, leaving China with a more gradual U-shape recovery trajectory on its month-on-month growth path,” said Bruce Pang, chief economist at Jones Lang LaSalle.