After 25 years, China revises down GDP growth to 7.3%
Sep 10, 2015 09:08 AM EDT
The growth rate of China's economy for 2014 has revised marginally lower to 7.3 percent from previous forecast of 7.4 percent. The drop in services sector weighed more on gross domestic product (GDP). According to the latest data from National Bureau of Statistics (NBS), the GDP stood at 63.6 trillion Yuan ($10 trillion) in 2013 and this was 32.4 percent lower than earlier projection. The latest data casts shadow over the Chinese government's target of seven percent for 2015.
Similarly, the National Bureau of Statistics has also revised down services sector growth for 2014 by 0.3 percent to 7.8 percent. Primarily this drop in services sector impacted the overall growth rate of GDP.
Though the marginal 0.1 percent downward revision may not impact the economy as a whole, but it'll definitely add to the negative sentiment. This downward revision is not a big deal, but it could further dampen the investor confidence, feel some analysts. The financial markets have already tumbled by 40 percent since mid June sending tremors across the global markets.
The latest downward revision by the Bureau underscores the ongoing economic slowdown in the dragon country. The latest numbers cast shadow on the Chinese government's target of achieving the seven percent for 2015, says economists.
The agriculture segment, the primary sector, recorded 4.1 percent growth in 2014 and growth of secondary sector including manufacturing industry was up 7.3 percent.
The services sector accounted for 48.1 percent of the world's largest economy in 2014, after the revised figures, as against 48.2 percent in 2013, said the Bureau.
The manufacturing and construction sectors contributed 42.7 percent to the GDP, while farm sector accounted for 9.2 percent.
Close on the heels of statements made by China's Finance Minister Lou Jiwei that GDP growth would be at seven percent for 2015. While agreeing on economy slowdown, he said the new economic policy will be in force for next five years.
The latest growth projection of 7.3 percent is the slowest in the past 25 years. After long time, China revised growth estimates downwards. For several years, China's government revised growth projections upwards ever year. Market observers feel that it's unusual downward revision from the government.
The Chinese government is not bothered about quarterly variations in economy growth, but it focuses on macroeconomic policy, said Lou.
China's economy recorded a growth rate of seven percent in the first half and this was in expected line of the government's target for 2015. The latest downward revision from the Bureau gives less scope for achieving the Chinese government target of seven percent for 2015.