Municipal officials have revealed the city's gross domestic product grew 12.1 per cent to 132.8 billion yuan (about HK$124.47 billion) in the first half. That was up from Guangzhou's 11.3 per cent growth in the first quarter and higher than the first-half growth figures for Beijing (9.1 per cent), Shanghai (10 per cent) and Guangdong (10.7 per cent). Industrial output rose 13.8 per cent to 171.2 billion yuan and sales were up 16.1 per cent to 167.9 billion yuan. This implied an accumulation of stockpiles worth 3.3 billion yuan, or 2.5 per cent of GDP. According to Guangzhou Statistical Bureau director Ma Yusheng, exports rose 12.7 per cent, to US$6.2 billion, in the first half - 2.4 percentage points higher than the corresponding national figure. Foreign-invested enterprises contributed the most to the growth. Their exports grew 16.6 per cent against 5.3 per cent growth for state-owned enterprises. Foreign-invested enterprises account for more than 54 per cent of Guangzhou's total exports against 42 per cent for state-held firms. Utilised foreign direct investment increased 5.7 per cent to US$1.3 billion. While retail sales of consumer goods increased 13.8 per cent to 66.1 billion yuan, Mr Ma identified sluggish domestic demand as the biggest problem confronting Guangzhou's economy. Deflation has steadily worsened since the February Lunar New Year holiday. Last month, the city's consumer price index fell a year on year 4.7 per cent against an overall first-half decline of 3.7 per cent. Fixed-asset investment by state-owned units was sluggish, up just 1 per cent to 28.8 billion yuan - 55 per cent of it property investments. It should pick up later this year and next as Guangzhou readies an ambitious, 10-year investment programme centred on Nansha, involving a deep-water port and heavy industrial zone.