China Q4 growth likely slowed to 7.2% : Poll
January 7, 2015, 9:17 am

The Reuters poll indicates that China would fail to reach the government’s 7.5 per cent full-year target in 2014 [Xinhua]

China recorded 7.3 per cent economic growth in the June-September quarter.

The Reuters poll indicates that China would fail to reach the government’s 7.5 per cent full-year target in 2014 and mark the weakest expansion in 24 years.

This would keep pressure on policymakers to head off a sharper slowdown this year.

The expected slowdown in growth of the world’s second-largest economy, from

Growth of 7.2 per cent in October-December would be the weakest since Q1 2009, when the economy grew 6.6 per cent as the worst of the global crisis passed.

Official fourth-quarter GDP data will be announced on Jan 20.

The poll of 31 economists showed bank lending, fixed-asset investment and factory output growth may have steadied in December, but factory price deflation likely worsened and consumer price inflation hovered near five-year lows.

“We expect the upcoming December data to show a still frail economy, tepid production momentum, and mounting deflationary pressures,” economists at UBS wrote in a note.

The People’s Bank of China (PBOC) unexpectedly cut interest rates in November for the first time in more than two years to lower borrowing costs to support growth. Later, it loosened loan restrictions to encourage banks to step up lending.

In the poll, M2 money supply is seen growing 12.5 per cent in December from a year earlier, up from November’s 12.3 per cent rise.

Fixed-asset investment, a key growth driver, probably grew 15.8 per cent in the whole of 2014, matching the pace in the first 11 months as the government approves more investment projects to offset the impact from a cooling property market.

The National Development and Reform Commission, the nation’s top planning agency, approved infrastructure projects with total investment value of 1.77 trillion yuan in 2014, with the bulk in the fourth quarter, according to Reuters calculations based on NDRC announcements.

Source: Agencies