China Q 4 GDP growth slows to 3.6% y y compared to Q 3's 4.9%
Expectations of more policy easing are growing.
BEIJING, January 16, Reuters -- China's economy likely grew at the slowest pace in 1 -- 1 2 years in the fourth quarter, dragged down by weaker demand due to a property downturn, curbs on debt and strict COVID 19 measures, raising heat on policymakers to roll out more easing measures.
The Reuters poll shows that gross domestic product GDP grew by 3.6% in October-December from a year earlier in the year, the lowest pace since the second quarter of 2020 and slowing from 4.9% in the third quarter.
Growth is projected to grow to 1.1% in the fourth quarter, from 0.2% in July-September.
GDP was likely to expand 8.0% for the year 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 several challenges in the year 2022, including persistent property weakness and the recent spread of the highly contagious Omicron variant.
Exports, which were 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 pledged to stay ahead of a slowdown ahead of a key Communist Party Congress later this year.
The central bank is going to unveil more easing steps, but it is likely to favour injecting more cash into the economy rather than cutting interest rates too aggressively, policy insiders and economists said.
Analysts believe that the central bank will deliver more modest easing steps, including cutting banks' reserve requirement ratios, the one-year loan prime rate, or LPR, the benchmark lending rate.
Analysts at ANZ said in a note that they saw a possibility that the central bank will cut the rate on its medium-term lending facility MLF on Monday.
The policymakers have pledged to increase fiscal support for the economy, speed up bond issuance, and plan for more tax cuts, as well as to spur infrastructure investment.
The monetary and fiscal easing may only be implemented in the second half of 2022 due to the transmission lags of these policies, analysts at Natixis said in a note.
The recent monetary easing and the stabilization of PMI factory activity have indicated that there is a direction in this direction, but more efforts are needed to boost fixed asset investment. According to the poll, growth is likely to slow to 5.2% in 2022.