Analysts say China's first quarter (Q1) economic data, released Wednesday, highlights areas of concern but should not fuel market pessimism.
The slowdown of the world's second-largest economy deepened in 2015 Q1, prompting calls for further policy easing. However, there were signs that the economy is gradually becoming better balanced.
SLOWING GROWTH
China's economy grew 7 percent year on year in Q1, down from 7.3 percent in 2014 Q4. This growth, the lowest quarterly growth rate since 2009, was in line with the 2015 "around 7 percent" target.
The National Bureau of Statistics (NBS) reported that growth in industrial output, fixed asset investment and retail sales in March all slowed and were below economists' expectations.
All key headline numbers and components of GDP weakened in Q1, reflecting persistent downward pressure on the economy, UBS economist Wang Tao said.
The ongoing property downturn and staggering exports outweighed a modest Q1 cushioning from solid infrastructure investment and resilient consumption, Wang said.
Wednesday's data is the latest in a string of numbers that suggest further weakness in the economy.
Export data for March, released on Monday, tumbled from a year earlier, due to sluggish global demand. Import shipments also shrank sharply.
Consumer inflation also remained tepid in March, while producer prices stayed in deflationary territory.
Premier Li Keqiang said on Tuesday that the government should make efficient use of policy tools to maintain growth, promote employment and raise efficiency.
This week, the World Bank trimmed its forecast for China's growth this year from 7.2 percent to 7.1 percent.
DESIRABLE OUTCOME
Despite the slowdown, the economy is still one of the world's fastest growing and enjoys sound fundamentals as the healthy pace of job creation and income growth continue, analysts said.
NBS spokesperson Sheng Laiyun said Q1 economic growth was within a "reasonable range" and the slowdown was within expectation.
