May 16, 2018 / 7:17 AM / in 10 months

CORRECTED-UPDATE 1-China cuts companies' power prices again as economy shows signs of cooling

(Corrects to delete reference to “10 percent” cut on April 1 as NDRC did not spell out size of reduction previously)

BEIJING, May 16 (Reuters) - China cut electricity prices for commercial and industrial firms for the second month in a row in May to reduce business costs, the state planning agency said on Wednesday, as data suggested the world’s second-largest economy is starting to cool.

Power prices were cut 2.7 percent from May 1, the National Development and Reform Commission (NDRC) said in a statement on its website, following an earlier cut from April 1.

The latest move will save companies 21.6 billion yuan ($3.39 billion) in costs, the NDRC said.

The April cut saved firms 43 billion yuan, it said.

As part of a broader plan laid out in Premier Li Keqiang’s work report in March, China aims to lower electricity prices by 10 percent before the end of this year.

So far, NDRC has cut electricity prices by about 7 percent in total, spokeswoman Meng Wei said at a news briefing earlier on Wednesday.

China reported on Tuesday weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States.

Industrial output growth was a bright spot, beating economists’ forecasts and up from a seven-month low in March. But some analysts believe the bounce may be short-lived.

Despite an upbeat first quarter, economists still expect China’s economic growth to slow to 6.5 percent this year from 6.9 percent in 2017, with a regulatory crackdown and a growing trade dispute with the United States seen as key risks, a Reuters poll showed. ($1 = 6.3688 Chinese yuan renminbi) (Reporting by Stella Qiu and Beijing Monitoring Desk Editing by Kenneth Maxwell & Kim Coghill)

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