China Economy Expands 7.7% in Q1
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China’s economy grew just 7.7 percent in the first three months of the year, a surprise figure that came in below analyst expectations and raises concerns that the nation’s recovery is faltering.
The growth rate, announced by the National Bureau of Statistics on Monday, was weaker than the 8.0 percent that most economists were expecting.
Gross domestic product had rebounded to 7.9 percent growth in the final quarter of last year, ending a nearly two-year slowdown. China’s full-year annual growth of 7.8 percent in 2012, however, was the weakest since 1999.
China’s economy grew just 7.7 percent in the first three months of the year, a surprise figure that came in below analyst expectations and raises concerns that the nation’s recovery is faltering.
The growth rate, announced by the National Bureau of Statistics on Monday, was weaker than the 8.0 percent that most economists were expecting.
Gross domestic product had rebounded to 7.9 percent growth in the final quarter of last year, ending a nearly two-year slowdown. China’s full-year annual growth of 7.8 percent in 2012, however, was the weakest since 1999.
In a statement the NBS cited “the complicated and volatile economic environment at home and abroad”, adding that the ruling Communist Party and government were committed to “making progress while ensuring stability”.
In an effort to boost the economy, Beijing last year relaxed monetary policy and access to credit, while keeping an eye on politically sensitive price increases.
Wendy Chen, a Shanghai-based economist at Nomura Securities, told AFP:
[quote] The (GDP) figure was lower than market expectations, indicating the recovery in the real economy was not on a solid foundation and remained weak. [/quote]
Chen added that given concerns about inflation rising in the next few months, it was unlikely the central bank will move to stimulate the economy by cutting interest rates “as loosening monetary policy may bring greater inflationary risks”.
Inflation remains moderate and registered at 2.1 percent in March.
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The surprise GDP figure came after President Xi Jinping last week expressed confidence in the economy and assured international business leaders it was in good shape.
According to Xi, “ultra-high speed of economic growth” is no longer “desirable” but a “relatively high speed of economic growth” will be possible.
He added that the slower pace of growth would help China rebalance its economy towards a consumption-led model rather than an export-driven model, something Beijing has been trying to achieve for years.
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