China’s economy softened in August, extending a slowdown in industrial activity and property prices as Beijing faces pressure to ramp up spending to stimulate demand.

Data published by the National Bureau of Statistics on Saturday showed weakening activity across industrial production, retail sales and property this month compared to July.

“We should be aware that the adverse impacts arising from the changes in the external environment are increasing,” said Liu Aihua, the bureau’s chief economist in a news conference.

Mr Liu said demand remained insufficient at home and the sustained economic recovery still confronts multiple difficulties and challenges.

China has been grappling with a lagging economy post-Covid, with weak consumer demand, persistent deflationary pressures and a contraction in factory activity.

Chinese leaders have ramped up investment in manufacturing to rev up an economy that stalled during the pandemic and is still growing slower than hoped.

Beijing also has to deal with increasing pressure to implement large-scale stimulus measures to boost economic growth.

While industrial production rose by 4.5% in August compared to a year ago, it declined from July’s 5.1% growth, according to the bureau’s data.

Retail sales grew 2.1% from the same time last year, slower than the 2.7% increase last month.

Fixed asset investment rose by 3.4% from January to August, down from 3.6% in the first seven months.

Meanwhile, investment in property declined by 10.2% from January to August, compared to last year.

The figures come after trade data for August saw imports grow just 0.5% compared to a year ago.

The consumer price index (CPI) rose 0.6% in August, missing forecasts according to data released on Monday. Officials attributed the higher CPI to an increase in food prices due to bad weather.

The core CPI, which excludes food and energy prices, rose by just 0.3% in August, the slowest in more than three years.