The growth rate in China was lower than the 7.3% posted for the three months to December. Last year, China’s economy, which is the world’s second largest, grew at its slowest pace since 1990.
It expanded by 7.4% in 2014, missing its annual growth target of 7.5% for the first time in 15 years. Despite the slowdown, the Chinese economy was still one of the world’s fastest-growing and analysts have said it was proving to be more resilient than expected.
However, they have also said that slower growth, together with the country’s cooling property market – a key economic driver – was likely to mean further easing by China’s central bank this year, including further rate cuts among other measures.
In February the People’s Bank of China unexpectedly cut interest rates for the second time since last November. Interest rate cuts together with injections of liquidity are some of the tools Beijing uses to fine tune its economic growth.
The latest growth numbers were by no means a hard landing – which some had feared – and were in line with the latest government target, analysts said. “Still, it represents a slowdown from the previous read of 7.3%,” Nicholas Teo from CMC Markets said. “And is one of the weakest numbers reported in quite a few years.”
In the first three months of 2009, amid the financial crisis, China’s economy expanded 6.6% from a year earlier.
China also released industrial production (IP) figures on Wednesday which fell to 5.9% month-on-month in March, down from forecasts for an expansion of 6.9% and the lowest since 2008.
Analysts said these figures were more glaring than the growth data. Mr Teo described the latest IP numbers as “unfavourable”.
“Together with the slower trade numbers reported earlier this week, the industrial production number may just set the tone for a quickening pace with regards further easing measures,” he said.
Evan Lucas from IG Markets said the IP numbers highlighted “the real issue facing China” as exports declined “and falls in work done were being felt across the board”.
Markets were lacklustre following the numbers.
