China third-quarter growth seen dipping to 6.8 percent, weakest since 2009

Wed Oct 14, 2015 5:51am EDT
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By Kevin Yao

BEIJING (Reuters) - China's economic growth is expected to fall below 7 percent for the first time since the global financial crisis in the third quarter, putting pressure on policymakers to roll out more support measures as fears of a sharper slowdown spook investors.

Chinese leaders have been trying to reassure global markets that Beijing is able to manage the world's second-largest economy after a shock devaluation of the yuan CNY=CFXS and a summer stock market plunge fanned fears of a hard landing.

But even the government concedes the economy is entering a slower growth phase after decades of breakneck expansion.

Growth in third-quarter gross domestic product (GDP) likely slowed to 6.8 percent from the same period last year, down from 7 percent in the second quarter, according to a Reuters poll of 50 economists.

That would be the weakest pace of expansion since the first quarter of 2009, when it tumbled to 6.2 percent, but far from an alarming loss of momentum.

The highest forecast in the poll was 7.2 percent and the lowest was 6.4 percent, though some investors fear current growth levels could already be much weaker than the official data will suggest.

"We expect the government to maintain loose monetary policy and step up fiscal spending in response to the economic slowdown," economists at China International Capital Corp (CICC), a domestic investment bank, said in a note.

"We believe that loosening measures may help cushion the slowing momentum in economic growth but it's difficult to reverse the long-term downward trend."   Continued...

A customer pushes a cart at a supermarket in Fuyang, Anhui province, August 9, 2015. REUTERS/Stringer