Chinese GDP growth slowed to 6.1% in the first quarter of 2009, down from 6.8% in the last quarter of 2008, according to the National Bureau of Labour Statistics for China (NBS). The figure represents a 4.5 percentage point fall on GDP growth recorded over the same time period last year.
According to an NBS statement, the international financial crisis, a sharp drop in export demand, reduced government revenue and increased unemployment contributed to the slowdown.
Unlike most countries, China publishes its GDP figures on a year-on-year basis, rather than a quarter-on-quarter basis at an annual rate.
According to Nouriel Roubini, a professor of economics at the Stern School of Business at New York University and the chairman of RGE Monitor, China’s fourth quarter GDP growth of 6.8% translated into a figure of zero, measured on a quarter-over-quarter basis.
Writing in his outlook before the publication of today’s GDP numbers, Roubini, who has gained the nickname “Dr Doom” for his gloomy predictions on the American economy, said it was clear that China entered a contraction in the fourth quarter of 2008.
“The relevant question now is whether the aggressive policy action undertaken by the Chinese authorities, starting with Q4 of 2008, will reverse this contraction and how fast,” he said. Today’s number would seem that in the first instance the contraction has become worse.
Despite Chinese authorities still maintaining that 8% GDP growth is possible in 2009, Roubini said a realistic figure would be closer to 5%. This is below the 6% forecast of Goldman Sachs, and 6.5% from the International Monetary Fund and World Bank.
“The government authorities may report a figure closer to their 8% target regardless of the actual true figure,” said Roubini. “But no one realistically believes that growth close to 8% can be achieved. Certainty the recent March data and the forward looking indicators of economic activity suggest that growth will pick up in Q2 and for the rest of the year from the near stall of Q4 2008 and Q1 2009.”