Jan, Feb figures show chill in economy
Updated: 2014-03-14 02:25
By Chen Jia (China Daily)
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Uncertainty likely to persist: Experts
The rapid deceleration of China's economic growth indicators in the year's first two months shocked the market, as industrial output, fixed-asset investment and retail sales all dropped to unusual lows.
Speculation has been widespread among experts that economic policy may be eased if the downward pressure continues to threaten the government's GDP target of about 7.5 percent this year.
The National Bureau of Statistics said Thursday that year-on-year industrial output growth rate slowed to 8.6 percent in January and February, down from 9.7 percent in December and 10 percent in November. It fell to its lowest level since May 2009.
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Growth of overall fixed-asset investment, which is seen as the strongest driver of the world's second-largest economy, dropped to 17.7 percent during the first two months, compared with whole-year growth of 19.6 percent in 2013 and 18.2 percent in the fourth quarter. It reached a 13-year low for those same months.
In the meantime, total retail sales increased by 11.8 percent, an easing from 13.6 in December and 13.7 in November, and was the slowest pace for the period since 2004.
The above figures, combined with earlier released sluggish data of exports and manufacturing Purchasing Managers Index, indicate that the whole economy may even slip below 7.5 percent for the first quarter, according to economists.
Hong Kong's Hang Seng Index retreated 0.67 percent at the close after rising as much as 0.6 percent earlier in the day. The Shanghai Composite Index pared gains after the reports and it closed 1.1 percent higher.
Bank of America Merrill Lynch lowered its forecast of China's first-quarter GDP growth to 7.3 percent from 8 percent after the reports.
The Ministry of Finance announced on the same day that in January and February, the nation's total fiscal income advanced by 11.1 percent, slower than 14.3 percent in December and 15.9 percent in November.
Xu Hongcai, a senior economist at China Center for International Economic Exchanges, a government think tank, called the economic performance in the first two months "unusual but acceptable".
"It shows that the economy will face many uncertainties this year, and policymakers should leave room for unexpected situations," Xu said.
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