China’s economic growth in the first quarter (Q1) of 2015 has reached the slowest quarterly pace in six years as it has been dragged down by a combination of an industrial slowdown and a weak housing market, the Chinese government announced on Wednesday.
Gross domestic product (GDP) in China during Q1 2015 rose 7 percent from a year earlier, in line with economists’ estimates. Although the growth rate still means that China ranks as one of the world’s fastest growing major economies, it was the nation’s slowest quarterly expansion since early in 2009, when it was still feeling the impact from of the 2007–2008 financial crisis.
The growth rate of 7 percent in Q1 2015 puts the country on pace for its slowest annual rate of expansion in 25 years.
“We expected the fall in economic growth,” said Sheng Laiyun of China’s National Bureau of Statistics. “As the economy enters the new normal, the drop in growth rate is good for structural adjustment and transformation.”
Chinese President Xi Jinping said in March during the annual Boao Forum that China’s economy was running as planned, despite the recent slowdown in growth.
“When looking at China’s economy, one should not focus on growth rate only,” Xi said during the forum. “We will focus on improving quality and efficiency, and give even greater priority to shifting the growth model and adjusting the structure of development.”
“As the (Chinese) economy continues to grow in size, around 7 percent growth would be quite impressive and the momentum it generates would be larger than the growth at double digits of previous years,” Xi said during the forum.
Earlier in March, China lowered its economic growth forecast to “about 7 percent” in 2015 as the nation adjusts to a “new normal” of slower but more sustainable growth.
China’s economic growth target of around 7 percent is seen as the minimum growth that the nation needs in order to fend off deflation and to keep employment strong enough so that it can push on with key reforms.
In 2014, China’s economic growth expanded by 7.4 percent, its slowest rate in 24 years and was the first time since 1998 that its growth rate fell short of the government’s official target.