China GDP growth slowest since 2012 but beats expectations

China’s economy grew at its slowest rate last quarter since the third quarter of 2012 – though it slightly exceeded economists’ expectations – increasing the chances of policy easing, but massive stimulus looks unlikely.

The gross domestic product grew 7.4 per cent in the first quarter from a year earlier, below the official target of about 7.5 per cent growth for this year and less than the 7.7 per cent in last year’s fourth quarter, the National Bureau of Statistics said.

GDP growth was also 7.4 per cent in the third quarter of 2012, the lowest rate since 6.6 per cent in the first quarter of 2009.

Most economists had forecast GDP growth would slow to 7.3 per cent last quarter.

A cooling of the world’s second-largest economy may complicate Beijing’s plan to deepen fiscal and financial reforms, as some of the planned measures, such as liberalising interest rates further, would push up financing costs, adding to the burden on businesses.

Weak industrial activity in China may hurt commodity-exporting countries such as Australia, Indonesia and Malaysia.