China April factory output grows 5.9%; misses forecasts

China's factory output rose 5.9% in April compared with the same period last year, slightly below forecasts and reinforcing expectations that the government will have to step up its efforts to boost the cooling economy.

A weak reading had been expected after the central bank cut interest rates early this week for the third time in six months to lower companies' borrowing costs and boost activity as the economy heads for its worst year in a quarter of a century.

Analysts polled by Reuters had forecast a 6.0% rise, up from 5.6% in March, which was the weakest reading since the global financial crisis.

Fixed-asset investment, a crucial driver of the world's second-largest economy, rose 12% in January-April from the same period a year ago, the National Bureau of Statistics showed on Wednesday.

Economists had expected a 13.5% gain, the same as in the first quarter of the year.

Retail sales rose 10% last month, missing expectations for a 10.5% rise and easing from March.

Analysts believe the central bank is embarking on its most sweeping policy easing campaign since the global crisis as the world's second-largest economy is weighed down by a cooling property market, declining investment, overcapacity and high levels of local government debt.

Market watchers expected further cuts in interest rates and banks' reserve requirements in coming months and possibly more measures to boost the housing sector.