China's GDP growth has slowed to 3.6% y y compared to Q 3's 4.9%
Expectations of more policy easing are growing.
BEIJING, Jan 16 Reuters -- China's economy likely grew at the slowest pace in 1 -- 1 2 years in the fourth quarter, dragged down by a property downturn, curbs on debt and strict COVID 19 measures, raising heat on policymakers to roll out more easing measures.
The data on Monday shows gross domestic product GDP rose by 3.6% in October-December from a year earlier - the weakest pace since the second quarter of 2020 and slowing from 4.9% in the third quarter, according to a Reuters poll.
Growth is expected to increase to 1.1% in the fourth quarter from 0.2% in July-September.
GDP went up 8.0% for 2021, which would be the highest annual growth in a decade, due to the low base set in 2020 when the economy was jolted by COVID 19 and stringent lockdowns.
The GDP data, along with December activity data, is due to be released on Monday at 0200 GMT.
The world's second largest economy, which has cooled over the course of last year, faces multiple headwinds in the year 2022, including persistent property weakness and a new challenge from the recent local spread of the highly contagious Omicron variant.
Exports, one of the few areas of strength in 2021, are expected to slow down, while the government is seen continuing its clampdown on industrial emissions.
Policymakers have vowed to stay away from a slowdown ahead of a key Communist Party Congress late this year.
Policy insiders and economists said that the central bank is likely to favor injecting more cash into the economy rather than cutting interest rates too aggressively, despite the fact that it is set to unveil more easing measures.
Analysts believe that the central bank will deliver more modest easing steps, including cutting banks' reserve requirement ratios and reducing the one-year loan prime rate LPR, the benchmark lending rate.
Analysts at ANZ said they saw a possibility that the central bank will cut the rate on its medium-term lending facility MLF on Monday.
Policymakers have pledged to step up fiscal support for the economy, increase bond issuance and plan for more tax cuts, as well as speed up local government special bond issuance.
Analysts at Natixis said that the monetary and fiscal easing could only be a larger effect in the second half of 2022 due to the transmission lags of these policies.
More efforts are needed to boost fixed asset investment because of the recent monetary easing and the stabilization of PMI factory activity. According to the poll, growth is likely to slow to 5.2% in 2022.