China’s growth dips below 7%, weakest since 2009 crisis

RSTV Bureau
Image of Chinese Currency - Renminbi (Yuan)

Image of Chinese Currency – Renminbi ( PTI )

China’s GDP has fallen to 6.9 per cent in the third quarter of this year which could prompt the Chinese leadership to roll out a fresh stimulus package to contain the slowdown.

6.9 per cent growth in the world’s second-largest economy is the slowest since the 2009 global financial crisis, data from China’s National Bureau of Statistics (NBS) revealed on Monday. In the previous quarter China’s economy grew at 7 per cent.

The government had set 7 per cent as the GDP target for 2015 and the third quarter growth, fell short of it. The fall in growth was a result of continued fall in exports which mounted pressure on the country’s economy.

In the first three quarters of the year, GDP hit 48.78 trillion yuan (USD 7.68 trillion) up 6.9 per cent year on year, according to the NBS.

This is the first time the quarterly growth rate had dropped under 7 per cent since the second quarter of 2009, when growth tumbled to 6.2 percent.

NBS spokesperson Sheng Laiyun said that global factors amid the world economic recovery had impacted China.

“Expectation of a US interest rate hike prompted volatility in commodity prices, stocks and foreign currency markets. Many countries devaluated their currencies, putting more pressure on Chinese exports, one of the three pillars of China’s economic growth,” Sheng told a press briefing.

China’s exports growth dropped 7.9 per cent year on year in the first three quarters to 17.87 trillion yuan, according to the NBS.

During the first nine months, industrial output grew 6.2 per cent year on year and fixed-asset investment climbed 10.3 per cent. Property investment grew 2.6 per cent year on year, while retail sales of consumer goods rose 10.5 per cent.

As the exports continue to fall, the Chinese economy is undergoing transition from an export-dependent economy to the one based more on domestic consumption.

Observers say while 6.9 per cent GDP was regarded as slightly above expectations, the continued slowdown is expected to raise pressure on policymakers to step up monetary policy to halt the slowdown.

In its battle against China’s worst economic slowdown in more than 6 years, the central bank in China has cut interest rates 5 times since November. Banks’ Reserve Requirement Ratios was also reduced 3 times this year.

(With inputs from PTI)