China’s economy down to 30-month low
16 Jan 2012
China's economy registered what seems to the lowest growth in 10 quarters with the slump in export demand and with officials extending a campaign against property bubbles in October-December 2010.
Gross domestic product, the value of all goods and services produced, was up 8.7 per cent as against a year earlier, the slowest pace since the second quarter of 2009.
The fourth straight quarterly slowdown in the world's second-largest economy further increases apprehensions that global expansion was faltering. The International Monetary Fund has warned of near-zero growth in Europe as also a ''substantial'' cut to its global forecast. China's exports were up after two years in December and inflation was down to a 15-month low, increasing the chances of premier Wen Jiabao to loosening policies.
Growth may be down at 7.5 per cent in the three months through March and 7.6 per cent in the second quarter, according to experts, prompting the central bank to ''front-load'' policy easing into the first half. This would go with one interest-rate cut in March and three reductions to banks' reserve requirement ratios, they add.
Asian stocks were down on debt sale today by France after Standard & Poor's lowered its rating of eight European nations sparking fears that the region's debt crisis could worsen (See: S&P downgrades ratings of France, 8 other euro zone nations). The MSCI Asia Pacific Index was down 1.3 per cent as of 3:50 pm in Tokyo, after it added 2.2 per cent last week.
China's money-market rate was up the most since September on 13 January, gaining another 59 basis points today to 5.4833 per cent, as banks picked up cash to meet demand from increased withdrawals before the weeklong Lunar New Year holiday that starts 23 January.
