China third-quarter GDP growth set for fresh slide below target

Wed Oct 17, 2012 4:07pm EDT
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By Nick Edwards

BEIJING (Reuters) - China's economy likely slowed for a seventh straight quarter in July-September, missing the government's target for the first time since the depths of the global financial crisis, and data on Thursday could signal still worse to come.

"The risks are stacked on the downside," said Jeremy Stevens, China economist at Standard Bank in Beijing. "Most macro figures, like industrial production, investment, retail sales and so on, have averaged a lower growth rate in the third quarter than in the second, suggesting additional momentum loss over the quarter."

With all those data points Stevens cited scheduled for release alongside GDP numbers at 0200 GMT, investors are braced for a burst of bad news - despite a surprise uptick in September trade and money supply data released at the weekend.

Economists polled by Reuters expect September's economic activity indicators to be flat on August's growth rate, leading to overall third-quarter GDP growth of 7.4 percent - the first miss of the official target since the first quarter of 2009's 6.5 percent.

Fixed-asset investment is expected to have risen 20.2 percent in January-September from a year earlier, unchanged from the first 8 months, but down from around 25 percent seen for most of last year.

Consumption is also expected to hold steady, with retail sales in September forecast to have expanded 13.2 percent from a year earlier. Growth in factory output is estimated at 9.0 percent, little changed from August's 8.9 percent.

Data will also detail real estate investment in the first 9 months. It was worth 13.7 percent of GDP in the first half of the year and is a crucial barometer of domestic economic activity, directly affecting 40 business sectors.

STEADY SLIDE   Continued...

A worker smashes coal as he prepares to burn limestone at a nearby furnace inside a limestone mine in Quzhou, Zhejiang province, October 12, 2012. REUTERS/Stringer