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China’s First Quarter GDP Was Slowest Ever

From Reuters comes the news that China’s economy slowed in the first quarter to its weakest pace on record. However, though an improvement in data for March offered tentative signs that the worst may be over for the world’s third-largest economy.

Annual economic growth slowed to 6.1 percent from 6.8 percent in the fourth quarter of 2008, slightly missing economists’ forecasts of a 6.3 percent rise and marking the weakest expansion since quarterly records began in 1992. Growth was dragged down largely by a sharp fall in exports, but a surge in lending in the first quarter spurred by the government’s 4 trillion yuan ($585 billion) stimulus package, helped cushion the blow.

Economists said there were no big surprises in the data, which confirmed a scenario of a gradual recovery in the latter part of the year, though they were divided over whether the government’s 8 percent growth target for this year was still attainable. “Overall, the data shows that China had a very weak start to the year, offset by some stabilization in economic conditions in March as the impact of policy stimulus starts to build,” said Brian Jackson, economist at Royal Bank of Canada In Hong Kong. “We think that the economy will remain subdued in the next few months but should start to improve gradually in the second half of 2009.”
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