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September 27, 2022

China GDP growth slows to 7.4 pc

China’s gross domestic product growth slipped in the first quarter to its slowest level in 18 months as the world’s second-largest economy continued to downshift, WSJ reports. Reduced momentum in investment and consumption – key drivers of the economy – were behind the moderately weaker quarterly growth. The 7.4 per cent growth over the year-earlier period was below the 7.7 per cent level seen in the fourth quarter of 2013, and slightly below the target of “about 7.5 per cent” set by China’s leadership for all of 2014. But it came in slightly above economists’ expectations, according to a Wall Street Journal survey of analysts. The weakened growth signals more choppy waters ahead for the world economy, as China is a major global growth engine. The slightly faster-than-expected result also muddies the waters on whether Beijing will step up measures aimed at supporting growth. “The economy will rely on investment for some time to come,” Standard Chartered STAN.LN -0.04 per cent  economist Li Wei said. “Without support, economic growth will continue to weaken.” Li added that he expects some monetary-policy support such as a reduction in banks’ reserve requirement ratios in the second half of the year. Others said authorities could add money into the financial sector, increase tax rebates or accelerate investment in transportation, alternate energy and senior-care facilities. The Shanghai and Hong Kong stock markets both were up modestly following the news. The Australian dollar – which is sensitive to Chinese economic results because Australia is a heavy supplier of resources –s trengthened against the U.S. dollar. Officials at the statistics bureau attributed then slower first-quarter growth data to weak external demand – affected in part by the severe U.S. winter – a struggling real-estate market and structural changes.

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