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Chinese economy slows down to 6.7% amid signs of stabilisation

The growth further narrowed from the previous quarter's 6.8%, which was already the lowest quarterly rate in seven years

Why China slide is bad news for India Inc

Press Trust of India Beijing
China on Friday said that its economy continued to slow down in the first quarter this year, declining to 6.7% but in line with government targets amid claims by officials that several key indicators showed signs of stabilisation in the world's second largest economy.

The country's GDP grew 6.7% year-on-year to reach 15.9 trillion yuan ($2.4 trillion), data released by the National Bureau of Statistics (NBS) showed.

The growth further narrowed from the previous quarter's 6.8%, which was already the lowest quarterly rate in seven years.

Chinese economy logged 6.9% last year, the lowest in over two-and-a-half decades.

Officials however say that Q1 growth of 6.7% was in line with market expectations and remained within the government's targeted range between 6.5 and 7% for 2016.
 

New growth momentum is gathering and some major indicators have seen positive changes, NBS spokesperson Sheng Laiyun said at a press conference, calling the first-quarter performance "a good start" to this year.

The retail sales of consumer goods increased 10.3% in the first quarter year-on-year, which points to increase in consumer demand as China tried to reset its export-led economy to one based on services and consumption to halt the slowdown.

In March, retail sales were up 10.5% year-on-year, faster than the growth rate in the first two months this year.

The value-added industrial output, an important economic indicator, expanded 5.8% year-on-year in the first quarter, accelerating from the 5.4% increase for the January-February period, according to NBS data.

Fixed-asset investment rose 10.7% year-on-year in the first quarter, a faster expansion than last year's 10%. Investment in the property sector grew 6.2%, accelerating from 1% for the whole of 2015.

Industrial output expanded 5.8%, accelerating from the 5.4% increase for the January-February period.

The service sector grew 7.6%, outpacing a 2.9% increase in the primary industry and 5.8% in the secondary industry. It accounted for 56.9% of the overall economy, up 2 percentage points from a year earlier, Sheng said.

A prolonged industrial glut, sagging foreign trade and cooling property investment dragged down China's growth in 2015 to 6.9%, the slowest pace in 25 years.

Authorities have taken a slew of measures to mitigate the downshift, cutting interest rates, reducing taxes, slashing overcapacity and initiating reforms to improve efficiency.

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First Published: Apr 15 2016 | 10:42 AM IST

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