BEIJING--China's economy grew at its weakest pace in nearly three years in the first quarter, with the annual rate of expansion slowing more than expected to 8.1 percent from 8.9 percent in the previous three months, the National Bureau of Statistics said on April 13.
The GDP data headlined a flurry of indicators published on April 13 signaling that China's economy is struggling to escape the grip of its worst sequential slowdown since the global financial crisis of 2008/09, reinforcing investor expectations of continued policy action to support growth.
"The main downside was with exports and some in terms of consumption," Kevin Lai, an economist at Daiwa in Hong Kong. "In general, I think the first quarter export results have disappointed the consensus. We still believe there should be more policy relaxation to add to growth domestically and offset weakness in exports."
The other indicators published on April 13 showed March industrial output expanded 11.9 percent, March retail sales rose 15.2 percent and quarterly fixed asset investment, one of the principal drivers of China's economy, grew 20.9 percent.
They were broadly in line with the increasingly conservative expectations of investors who have grown concerned in recent weeks that the bottom of China's economic cycle would extend into the second quarter of the year.
Economists polled by Reuters had forecast annual growth of 8.3 percent for the first quarter.
The fifth successive quarter of slowing annual growth in the first three months of 2012 left the economy on track for its weakest full year of expansion in a decade.
The GDP number matched the 8.1 percent posted in the second quarter of 2009, when policymakers in the world's second-biggest economy were rolling out 4 trillion yuan ($635 billion) of stimulus to escape the grip of a financial crisis that had driven global trade to a virtual halt.
China's economy expanded by 9.2 percent in 2011, a two-year low. Economists polled by Reuters expect growth in 2012 to ease further to 8.4 percent, which would be its slackest since 2002.
The downside risks have intensified after patchy data since the start of the year, raising fears that the downward drift will extend into the second quarter.
Global demand for China's exports may remain sluggish into mid-year, with much of the euro zone seen in recession and weak jobs data last week reviving concerns about the strength of the U.S. economic recovery.
China's statistics agency said on April 13 the country still faced difficulties stabilizing export growth.
But March money supply data released on April 12 suggested that a recovery might be gaining traction, with new loans made in the month topping 1 trillion yuan ($158.55 billion) for the first time since January 2011, coming in about 25 percent ahead of expectations after two straight months of underperformance.
That data, coupled with a bounce in the index of China leading indicators calculated by the Organization for Economic Cooperation and Development (OECD), leaves some economists more confident that growth was likely to rebound in coming months.
The OECD leading indicator has successfully forecast previous turning points in China's business cycle.
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