Chinese President Xi Jinping’s campaign to rein in lavish spending by officials and state-owned companies is proving so effective that it risks helping end the nation’s economic rebound after one quarter.
Bank of America Corp. is among 11 of 40 respondents in a Bloomberg News survey who estimate first-quarter expansion was at or below the previous period’s 7.9 percent pace. The world’s second-largest economy probably grew 8 percent in the January- March period from a year earlier, according to the median forecast ahead of data due April 15 in Beijing, down from an 8.2 percent projection in February.
Xi’s efforts are restraining consumer spending and making it tougher for the new government to boost domestic demand as factory output slows. Large-restaurant and catering sales fell for the first time in more than three decades in the first two months of the year, while demand and prices for luxury items such as Moutai liquor and Longjing tea have slumped.
October-December growth in gross domestic product represented the first acceleration in two years, up from the third quarter’s 7.4 percent rate. For the full year, expansion was 7.8 percent, the slowest since 1999.
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