China economic growth slows to 18-month low in first-quarter

Wed Apr 16, 2014 2:29am EDT
 
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By Adam Rose and Xiaoyi Shao

BEIJING (Reuters) - China's economy grew at its slowest pace in 18 months at the start of 2014, but did a touch better than expected and showed some improvement in March, suggesting Beijing will not rush to follow up recent steps to support activity.

Authorities have ruled out major stimulus to fight short-term dips in growth, signaling the slowdown was an expected consequence of their reform drive, even as some analysts think the economy will lose further momentum.

The economy grew 7.4 percent in the January-March quarter from a year earlier, the National Bureau of Statistics said on Wednesday. That was slightly stronger than the median forecast of 7.3 percent in a Reuters poll but still slower than 7.7 percent in the final quarter of 2013.

It was China's slowest annual growth since the third quarter of 2012, when the world's second-largest economy also grew 7.4 percent.

"The slowdown of China's economy is a reflection of a transformation of the economic mode," said Sheng Laiyun, of the National Bureau of Statistics.

"There is no fundamental change in the improving trend of China's economy. The economy is still moving steadily towards the expected direction."

For the quarter, the economy grew 1.4 percent, the slowest rate in two years, which Credit Agricole strategist Dariusz Kowalczyk said equated to annualized growth of 5.8 percent.

"This highlights the depth of deceleration at the start of the year," he said.   Continued...

 
A labourer works at a construction site in Hangzhou, Zhejiang province, April 14, 2014. REUTERS/William Hong