China GDP growth slows to 6.7% in first quarter: govt

China's economy grew 6.7 percent in the first quarter of 2016, its slowest quarterly expansion in seven years, government data shows
AFP

Beijing (AFP) – China’s economy grew 6.7 percent in the first quarter of 2016, its slowest quarterly expansion in seven years, the government said Friday, but indicators for March improved. 

The figure released by the National Bureau of Statistics (NBS) matched the median forecast of economists polled by AFP before the release, and was within the government’s target of 6.5-7.0 percent for the year.

Industrial output rose 6.8 percent in March, the NBS said, accelerating from the previous month and beating expectations in a positive signal for the world’s second largest economy, a key driver of global growth. 

The economy saw “sound development” in the first quarter, the NBS said in a statement, adding that the figures showed “positive changes on major indicators”.

But it cautioned: “We must be aware that we are in a critical stage of transformation and upgrading as well as replacing old drivers of growth with new ones.”

Retail sales rose 10.5 percent year-on-year in March, the NBS figures showed, while fixed asset investment rose 10.7 percent in the first quarter compared to the same period in 2015.

The output, sales and investment figures all came in ahead of expectations in a Bloomberg News poll.

But the NBS said that “difficulties on structural adjustment persist and downward pressure on the economy cannot be ignored”.

Louis Kuijs of Oxford Economics said the figures showed “a milder deceleration than many had feared”, which leading to “upward revisions” in growth forecasts. 

But the outlook for most expansion drivers was “still subdued” he said, so “the government will need to continue to rely on stimulus, notably infrastructure investment”.

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