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Update - Quick take: China's Q1 GDP growth slows to 7%

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China's economic growth slowed to 7 per cent in the first quarter of 2015, down from 7.3 per cent in the fourth quarter, the National Bureau of Statistics (NBS) announced on Wednesday.

CHINA's economic growth slowed to 7 per cent in the first quarter of 2015, down from 7.3 per cent in the fourth quarter, the National Bureau of Statistics (NBS) announced on Wednesday.

This is slightly better than economists' forecast in a survey by AFP, but in line with the median forecast in a Reuters poll.

China's Q1 gross domestic product (GDP) growth is the worst for a single quarter since the first three months of 2009, in the depths of the global financial crisis. Other key indicators also slumped to new multi-year lows.

Here are some comments on the latest data:

Qu Hongbin, co-head of HSBC's Asian Economic Research:

"The headline Q1 GDP growth rate came in line with market expectation at 7.0% y-o-y, and a touch below ours. However, sequential growth weakened further to 1.3% q-o-q from 1.5%. This means that in annualised q-o-q terms, growth slowed to 5.2% from 6%. The further slowdown in growth momentum suggests that unless more forceful easing measures are delivered, there may not be sufficient demand in the economy to reach a 7% growth target for the full year. In fact, given much higher base effect in Q2-Q4 2014, sequential growth will have to pick up much more meaningfully, to the range of 1.7%-2% q-o-q, for the y-o-y growth rate to stay above 7%.

"Today's data suggest that underlying growth momentum is already at policy makers' bottom line, and warrants further policy easing. We expect the PBoC to cut policy rate and reserve ratio in the coming weeks."

Tom Rafferty, Asia editor at The Economist Intelligence Unit (EIU) in Beijing:

"First quarter economic growth came in slightly weaker than we had expected. We will be reviewing our forecast for 7% real GDP growth in the year as a whole, with a view to revising it downwards.

"China's economy is slowing at a rate with which the government is probably uncomfortable and more concerted policy stimulus is now likely. Although 7% growth in the first quarter was in line with the full-year target of 'about 7%' expansion, March data on industrial production, fixed-asset investment and retail sales pointed to weak momentum behind the economy as it heads into the second quarter.

"We have pencilled in a further benchmark interest rate cut this year and expect fiscal policy to shift to a more expansionary stance. Domestic infrastructure projects tied to the government's 'one belt, one road' strategy are likely to be a particular focus.

"This ought to help to soften the pace of the slowdown in investment growth, the main driver of the economy, but not abate it entirely. Headwinds from the property sector are still strong, and recent steps to loosen mortgage lending and house-purchasing restrictions are yet to improve buyer or developer sentiment. Forward-looking indicators for property construction point to a further investment slowdown in the coming months.''

Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo:

"Some of the details were disappointing, but overall, the China data did not change anyone's expectations."