China’s economy sharply underperformed in July, with widespread flooding and an outbreak of the coronavirus Delta variant exacerbating concerns that the country’s growth trajectory would continue to lose momentum.

Official data released on Monday showed that retail sales grew 8.5 per cent compared with the same month a year earlier, helped by base effects from 2020, while industrial production rose 6.4 per cent. Economists polled by Bloomberg had anticipated growth of 10.9 per cent and 7.9 per cent respectively.

China has instigated strict travel restrictions in response to its biggest outbreak of the coronavirus this year, which began in mid July in the city of Nanjing and has since led to hundreds of new infections across multiple cities. Extreme flooding centred around Henan province has also curtailed activity over the past month.