The Chinese economy expanded at the weakest pace in nearly three years in the first quarter of 2012, with growth decelerating more than expected from the fourth quarter of 2011, mounting pressure on the government for continued policy action to support economic activity.
The gross domestic product expanded 8.1 percent year-on-year in the first three months of 2012, slower than the fourth quarter's 8.9 percent increase, the National Bureau of Statistics said Friday. The latest result was the weakest in 11 quarters. Economists expected a slowdown in growth to 8.4 percent.
On a quarterly basis, the economy grew 1.8 percent, the statistical office said.
Exports, accounting for over 30 percent of GDP growth, are slowing as the global economy swirls under the maelstrom of a fragile recovery and the debt crisis in Europe.
Earlier in March, the Chinese government trimmed its GDP forecast for 2012. The Dragon nation now estimates GDP growth of 7.5 percent for the year, which by global standards is fairly robust, but pales in comparison with the past growth statistics of the nation or with that of the other BRIC nations.
International lending agencies have acknowledged the slowdown in China and trimmed their growth forecast for the nation. On Thursday, the World Bank lowered its 2012 GDP forecast for China to 8.2 percent from 8.4 percent, citing a pronounced deceleration in investment growth, slowing consumption growth and weak external demand.
In a report released Wednesday, the Asian Development Bank slashed its growth projection for China to 8.5 percent in 2012 from 9.1 percent.
Premier Wen Jiabao has pledged to shift focus to more domestic consumption-led growth, as the ongoing uncertainties in Eurozone and weakness in global trade dimmed the prospects of a pronounced expansion in exports.
Last month's trade data presented a mixed picture. While the trade balance reversed to a surplus of $5.35 billion in March from a deficit of $31.48 billion in February, the highest since 1989, import growth slowed significantly despite government's efforts to boost domestic consumption. Export growth slowed markedly, but the slowdown in imports outpaced that of exports.
In its latest policy-easing move, the People's Bank of China cut the reserve requirement rate for all commercial banks by 50 basis points for the second time in three months in February to boost lending amid sluggish economic growth. However, a rebound in inflation in March has dimmed the prospects of further monetary easing.
Separately, the statistical office reported that the industrial production grew 11.9 percent year-on-year in March, compared with expectations for a 11.5 percent expansion. Retail sales increased 15.2 percent annually in March while expectations were for a 14.8 percent rise.
Urban fixed asset investment expanded 20.9 percent during the three months ended March, slightly slower than the 21 percent increase forecast, the statistical office said.
by RTT Staff Writer
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