China economic growth falls

China’s economy, the second-largest in the world, has grown at its slowest rate for nearly three years, reports the BBC.

There was an annual increase rate of 8.1 per cent in gross domestic product in the first quarter, a fall from 8.9 per cent during the last quarter of 2011. That is below what many analysts had forecast, with the majority expecting the figure to be nearer 8.3 per cent.

The country has been affected by a fall in demand in crucial markets such as Europe and the US. At the same time, demand domestically has proved to be difficult to stimulate. Daiwa Capital Markets’ Kevin Lai said that they were slightly disappointed and that the main downside was the exports and consumption.

The World Bank warned on Thursday that China’s recovery could slow further in the months ahead. The bank cuts its expansion outlook for the economy for this year from its previous projection of 8.4 per cent to 8.2 per cent. It warned that Beijing’s key export markets slowing down and the ongoing correction in the country’s property markets were risks to future growth.

The increase in consumer and property prices in China has been the main focus of the country’s policymakers during the last few months. The central bank has carried out a number of measures to reduce lending in an effort to ensure property prices are kept in check and consumer price growth is controlled.