Econintersect: For the year 2014 China’s GDP growth dropped to a calendar year level not seen since 1990, 7.4%, missing the government’s target of 7.5%. The first quarter 2015 has come in even lower at 7.0% growth year-over-year. Even though this was the consensus expectation reported by Bloomberg 13 April, Asia-Pacicifc stocks immediately dropped an average of 0.3%, which followed declines in many markets on Monday. Reuters reports that many are suggesting that the Chinese government will “roll out more policy stimulus to avert a sharper slowdown“.
The following graph shows the two year trend for GDP growth. The current quarter is below the previous quarter by the same amount as the second quarter of 2013 dropped from Q1 2013. That sequence was followed by a very strong quarter. We will be watching to see if the same can occur this year.
The year-over-year GDP growth back to 1990 is shown in the next graph, data plotted for every quarter. The only times that a quarterly y-o-y print as low as 7% has been during times of financial crisis: The 1998 Asian financial crisis, the peak of the dot.com bubble and the 2001 recession.
The following graph from Fortune shows the calendar year real GDP growth numbers for China since 1992.
- China first-quarter GDP growth seen dipping to 6-year low, more policy stimulus on cards (Kevin Yao, Reuters, 14 April 2015)
- Asian Stocks Drop With Aussie as Data Shows Weaker China Growth (Emma O’Brien and Nick Gentle, Bloomberg Business, 14 April 2015))
- China GDP Release Guide: What to Watch for Beyond the Headlines (Bloomberg Business, 13 April 2015)
- China GDP Annual Growth Rate (Trading Economics, 14 April 2015)
- China’s growth slowed to 24-year low in 2014 (Scott Cendrowski, Fortune, 20 January 2015)