by Kevin Yao
BEIJING (Reuters) – China’s economy is expected to post weaker growth in the first quarter due to a prolonged slowdown in the property sector and weak private sector confidence, a situation that is weighing on demand and keeping pressure on political decision-makers for the announcement of new recovery measures.
Data released on Tuesday is expected to reveal gross domestic product (GDP) up 4.6% in January-March on an annual basis, a slowdown from 5.2% recorded in the previous quarter and the weakest rate since the first quarter of 2023, according to a Reuters survey.
The world’s second-largest economy, weighed down by the prolonged slowdown in the real estate sector, growing local government debt and weak private sector spending, is struggling to ensure a strong and sustainable recovery from the Covid-19 pandemic.
The Chinese government has set an economic growth target of around 5% for this year, which has been called ambitious by most analysts.
China’s economy has shown solid momentum at the start of the year, but March data on exports, consumer price inflation and bank lending showed that momentum could return. run out of steam and that a new recovery plan could be necessary to stimulate demand.
“I think first-quarter GDP growth could be slightly stronger than expected, it could be close to 5 percent,” said Zong Liang, head of research at Bank of China.
“The growth target is achievable because we still have room for political maneuver.”
On a quarterly basis, China’s economy is expected to grow 1.4 percent in the first quarter, an acceleration from the 1.0 percent growth recorded between October and December, the survey showed.
Chinese GDP data will be released on Tuesday at 02:00 GMT.
Analysts polled by Reuters expect the central bank to cut banks’ reserve requirement ratio (RRR) by 25 basis points in the third quarter, following a 50 basis point cut at the start of the year, largest in two years.
(Reporting by Kevin Yao; Alban Kacher, edited by Blandine Hénault)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
