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Economic growth may post weak pace in first 2 months

Shanghai Daily, March 7, 2014 Adjust font size:

China's pace of economic growth may have weakened in the first two months of 2014, according to analysts.

Economic data to be released at the weekend may have some good news that inflation is likely to grow at a slower pace, but they may also reveal an easing in other real activity indicators, including trade, investment and industrial production, analysts said.

Lu Zhengwei, chief economist at the Industrial Bank, said the data would signal moderating growth on all fronts and trigger worries for the future.

"The investment rate is likely to plunge to the lowest level in nearly a decade, and export growth may fall to a marginal 0.5 percent," Lu said. "There is also growing pressure from overcapacity while a slower inflation rate can also indicate lost growth momentum."

China's trade was the star performer in January when exports jumped 10.6 percent from a year earlier and imports grew 10 percent.

Chang Jian, an economist at Barclays, said the January trade data were driven in part by frontloading of shipments ahead of the Chinese New Year holiday from the end of January, and exports in February may have risen only 1 percent year on year.

"We expect a pullback in export growth after the surprisingly strong increase in January, given weakening export orders and a reversal of the holiday-related distortion ... Inflation is likely to drop 2.1 percent from 2.5 percent, led by lower meat prices," Chang said.

Chang predicted the January-February activity data to show slower growth, given the soft demand outlook suggested by the slight drop in the recent Purchasing Managers' Index that measures the manufacturing sector.

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