SHANGHAI (Reuters) - China's economy is expected to slow to an annual 7 per cent in the first quarter of this year, a top Chinese government think-tank said in a research report, a sign policymakers will have to roll out more stimulus to support faltering growth.
The forecast by the State Information Centre underscored the rationale of Saturday's move by China's central bank to cut interest rates for the second time in less than four months as it steps up efforts to ward off deflation.
"Our country's economic growth still faces relatively heavy downward pressure amid structure adjustments," the think-tank said in its research report published in the official China Securities News on Monday.
"As such, it will continue searching for a bottom in the first quarter of 2015 and is preliminarily forecast to grow around 7 per cent in the quarter," it said.
The think-tank operates under the purview of China's top economic planner, the National Development and Reform Commission.
China's economic growth held steady at 7.3 per cent in the fourth quarter of 2014 from a year earlier but still hovered near the weakest pace since the global financial crisis, reinforcing expectations that policymakers will have to roll out more support measures to avert a sharper slowdown.
China's consumer price index (CPI) is expected to increase only 1.2 per cent on-year in the first quarter of 2015, compared with 2 per cent a year earlier, the think-tank said.
Annual growth of exports is expected at 5 per cent in the first quarter, slowing from 6.1 per cent a year earlier, while imports are likely to decrease 10.7 per cent in the quarter, compared with a 0.4-per cent increase in the same period of 2014, it said.