China Center Dataflash: Q1 growth rate masks underlying volatility

  • Authors:
    Andrew Polk
  • Publication Date:
    April 2012
  • Report Number:
    China-DF-04-23-12

This China Center members-only Dataflash provides a brief interpretive summary of China’s official monthly economic data release – April 2012 (March 2012 data).

  • On April 13th the National Bureau of Statistics announced that first quarter GDP growth came in at 8.1 percent, the lowest growth rate since Q1 2009.
  • Household consumption accounted for 3.5 percentage points of the 8.1 percent growth rate in the first quarter, up from the 2.6 percentage points for 2011. Even though investment tends to start off slowly each year, the tentative increase in private consumption’s share of GDP growth in this first quarter is a positive sign for the domestic rebalancing picture.
  • New loans jumped to 1.01 trillion RMB in March, up from the 711 billion RMB recorded in February. The loan data came in well above expectations and registered the highest one-month credit expansion since January 2011.
  • Inflation accelerated to 3.6 percent y-o-y in March, from 3.2 percent in February. Food prices grew faster than in February, up to 7.5 percent from 6.2 percent, with fresh vegetables driving much of the increase by posting a 20.5 percent increase for the month.
  • Industrial output picked up in March to 11.9 percent y-o-y, up from the average 11.4 percent of the January-February period. However, the 11.6 percent average growth for the first quarter of 2012 is the lowest since the second quarter of 2009, reflective of the softening growth in China’s manufacturing sector. In addition Fixed Asset Investment slowed to 20.9 percent y-o-y for the first quarter, the slowest expansion in years, and implying a 19.7 percent y-o-y growth rate for March alone.
  • The trade balance in China posted an unexpectedly large surplus at 5.35 billion USD in March, up from the 4.2 billion USD deficit for the January-February period.

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