China GDP growth estimated at 8.4% in Q1, slowest since 2009
Only in China, a 8.4 percent growth rate is considered "slow".
China's economy may have expanded about 8.4 per cent in the first quarter, the slowest pace since early 2009, according to an estimate given by a government official 10 days before the data is due, adding to expectations of policy easing by Beijing.
Mr Zhang Xiaoqiang, vice-chairman of the National Development and Reform Commission, cited "relevant China research institutes' initial figures" for the estimate and predicted a gain of about 3.5 per cent in consumer prices. He spoke yesterday during a panel discussion at the Boao Forum for Asia, a gathering of government and business leaders on China's tropical island of Hainan.
The growth figure compares with the 8.3 per cent median estimate of 28 economists surveyed by Bloomberg. The fifth straight slowdown in quarterly growth will underscore concerns that weakness in the Chinese economy - the world's second-biggest - is set to limit a global expansion already capped by Europe's austerity measures.
"I believe growth will hit the bottom in the first quarter, but a sharp rebound in the following quarters is unlikely," said Mr Lu Ting, chief Greater China economist at Bank of America in Hong Kong. The weaker growth was caused by the impact of Europe's debt crisis, which hurt China's exports he added.
Chinese Premier Wen Jiabao last month pared this year's expansion target to 7.5 per cent from an 8 per cent goal in place since 2005, part of government plans to guide growth towards consumption and away from exports. In the fourth quarter of last year, growth was 8.9 per cent.
China had its largest trade deficit since at least 1989 in February as Europe's sovereign-debt turmoil damped exports and imports rebounded after the week-long Chinese New Year holiday. Exports fell for the first time in two years in January, while industrial production and retail sales have slowed this year.
Analysts widely expect the central bank to continue to cut the amount of cash that commercial lenders must hold as reserves to crank up credit expansion, but the chances of a near-term cut in benchmark interest rates remain limited.
Analysts in a Bloomberg survey last week unanimously said that bank reserve requirements will fall this year, while only nine of the 20 predicted lower benchmark borrowing costs.