China’s GDP grew only 6.7% in the first quarter – Terra Colombia

China’s economy grew in the first quarter only 6.7 percent over the same period last year, according to official figures released today in Beijing.

The growth of gross domestic product (GDP) was the slowest of the second economy in the world since the outbreak of the global financial crisis seven years ago.

The increase of 6.7 percent is located within the range provided by the Chinese government for the whole of this year, of between 6.5 and 7.0 percent . Last year, China’s GDP had increased by 6.9 percent, the lowest growth in 25 years.

The International Monetary Fund (IMF) corrected this week raised its growth forecast for China in 2016, up 6.5 percent, two more than previous forecasts tenths.

Indebtedness and weak demand

In the first three months of 2016, investment in capital goods, industrial production and sales retail trade rose more than expected. For this reason, the spokesman for the Institute of Statistics of China spoke of a “good start” of the year. Growth is gaining momentum again he said.

However, GDP growth in the first quarter was driven largely by lending, raising new questions about the sustainability of growth. In March alone, the volume of loans granted was 188 billion yuan (25.000 million) higher than in the same month of 2015.

Investment in capital goods increased in the first three months of the year more than expected, by 10.7 percent, compared to ten percent in the same period of 2015. Industrial production grew by 5.8 percent, four tenths more than in the first quarter From last year.

According to the president of the European Chamber of Commerce in Beijing, Jörg Wuttke, review the long-term problems plaguing the Chinese economy remain unresolved. In this regard he mentioned the growing debt, excess capacity, weak domestic demand and a hyperactive financial sector.

“There is no change in trend, but only a temporary respite,” said Wuttke. According to analyst Christopher Balding, the HSBC Business School in Shenzen, steady growth in the volume of credits granted without the necessary impetus to reforms is a long-term problem in China that the government in Beijing is not attacking.