China cut a key interest rate on Thursday, the second cut this week, after a series of official data painted a bleak picture of the post-Covid recovery in the world’s second-largest economy.

The People’s Bank of China cut its key interest rate policy, the medium-term lending rate, from 2.75 percent to 2.65 percent, as the one-year interest rate determines the cost of lending to banks.

It was the first rate cut since last August and was widely expected after the central bank’s surprise cut to China’s seven-day reverse repo rate on Tuesday.

It cut the repo rate by 0.1 percent to 1.9 percent, the first since August.

The move will boost liquidity in the banking system and make short-term loans cheaper as authorities try to shore up the continued ailing economy.

Uphill battle

New government data on Thursday highlighted the uphill battle the country faces, with shoppers slowing and factories slowing.

Retail sales rose 12.7 percent in May, but the rate of growth slowed from 18.4 percent in the previous month and came in less than economists expected. Industrial production rose 3.5 percent, according to estimates, but growth was weaker than in April.

Meanwhile, more young people are unemployed in Chinese cities and towns, and the urban youth unemployment rate, already at record levels, hit another new high in May, reaching 20.8 percent.

The unemployment rate for 16 to 24 year olds is 20.4 percent. This was slightly higher than the April data.The official data did not include the rural unemployment rate.

JPMorgan CEO Jamie Dimon, who visited China recently, expressed concern about the number, Bloomberg reported in a television interview, saying, “It’s a scary number… They need (economic) growth.”

The youth unemployment rate will worsen when 11.6 million college students enter the job market this summer, according to estimates from the Education Department earlier this year.

Much of the latest economic data is “already below consensus lows,” said Macquarie’s chief China economist Larry Hu, noting that the weakness added to “the rush for more stimulus.”

“Recent interest rate cuts clearly mean policymakers feel the urgency to increase policy support,” he wrote in a statement on Thursday.