China’s central bank chief said that the nation’s growth rate has tumbled “a bit” too much and that policy makers have scope to respond, underscoring forecasts for further monetary easing in the world’s second-largest economy.
“China’s inflation is also declining, so we need to be vigilant to see if the disinflation trend will continue, and if deflation will happen or not,” People’s Bank of China Governor Zhou Xiaochuan, 67, said Sunday in remarks at the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. “China can have room to act,” both with interest rates and “quantitative” measures, he said.
Zhou’s remarks follow signs that China slowed further in the first quarter, after recording its weakest expansion since 1990 last year. The economy expanded 6.28 percent in February from a year earlier, Bloomberg’s monthly growth tracker shows, and the government’s official factory reading due Wednesday likely worsened, according to economists surveyed by Bloomberg.
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