Bangkok, June 18:China’s central bank kept a key lending rate unchanged on Monday, choosing not to loosen credit as data for May showed signs of persisting weakness in the world’s No. 2 economy’s manufacturing and real estate sectors.

The central bank kept its rate for 1-year medium-term lending facility loans, used as a benchmark for other lending rates, at 2.5%. The decision aligned with expectations: instead of cutting already low interest rates Beijing has focused on channeling spending to areas considered to be high priorities such as high-tech industries.

The government reported Monday that factory output fell 5.6% in May from the year before, slowing from 6.7% in April, though analysts noted some impact due to more work days in this year compared with the year before.

Property investments fell 10% year-on-year and home sales sank 30.5%, suggesting a raft of measures to try to turn around a real estate slump have yet to take hold. Home prices in major, so-called Tier 1 cities like Beijing and Shanghai, fell 3.2%.

The downturn in the property industry followed a crackdown on excessive borrowing by property developers several years ago. That led many to default on their debts as they meanwhile have struggled to deliver apartments that buyers had already paid for. That also hit contractors and suppliers of building materials, appliances and other household goods.

“This data was certainly on the disappointing side and may ring some alarm bells, as May’s policy support package has not yet translated to a slower decline of housing prices, let alone a stabilization,” Lynn Song, chief economist for Greater China at ING Economics, said in a commentary.

Disruptions and job losses during the COVID-19 pandemic, coupled with falling prices for homes — a staple form of investment for most Chinese families — have left many Chinese unwilling or unable to spend, sapping the economy of another major driver of business activity.

“Although the external environment is complex and changeable and the domestic economy is also facing some troubles and challenges, the fundamentals of economic recovery and long-term improvement have not changed,” Liu Aihua, spokesperson for the National Bureau of Statistics, told reporters in Beijing.