China growth slows to a 5 year low; annual target at risk
China’s economy grew at its slowest pace since the global financial crisis, and risks missing its official target for the first time in 15 years, causing speculation the government may introduce more stimulus measures.
A pick-up in factory manufacturing output and government confidence that the labour market remains stable were offset by further slowing in the property and retail sector, and economists remained divided on whether or not authorities would step in with major stimulus measures such as interest rate cuts.
Gross domestic product rose by 7.3% in the third quarter from a year earlier, compared to 7.5% in the previous quarter, official data showed. The figure beat market forecasts for 7.2% growth but still marked its weakest performance since March 2009.
China’s government aims to achieve 7.5% economic growth this year, but many analysts believe that they will not be able to meet that target.
There is also speculation the government may take more steps to boost growth.
Beijing recently unveiled measures aimed at stimulating more consumer spending, including relaxing its home-purchase controls and injecting billions of dollars of liquidity into its biggest banks as they seek to limit a property-induced slowdown.
China’s central bank also cut the interest rate it pays lenders for 14-day repurchase agreements last week and signaled it will tolerate a weaker expansion, leaving the economy headed for the slowest full-year growth since 1990.