China: Factory output growth logs slowest start in six years

China's industrial output rose 6.8% in January and February compared with the same period a year ago.

The two-month factory output reading marks the weakest start to a year since 2009. Analysts polled by Reuters had forecast a 7.8% increase.

Dismal factory data for the two-month period suggests that the world's second-largest economy will grow at its slowest pace in a quarter of a century in 2015.

It also suggests that further stimulus could be needed to boost the Chinese economy.

Poor data

Fixed-asset investment, a crucial driver of the Asian nation, rose 13.9% in January and February from a year earlier, data from the National Bureau of Statistics showed on 11 March.

Economists had expected a 15% gain.

Retail sales rose 10.7% in the first two months of the year, missing expectations for an 11.7% rise.

China combines its January and February data releases for factory output, investment and retail sales to curtail distortions from the Lunar New Year holiday, which fell in mid-February in 2015 and late January in 2014.

Wang Tao, chief China economist at UBS Group in Hong Kong, said in a note ahead of the data release: "With January-February data revealing weakening economic momentum and mounting deflationary pressure, policy easing has been hastened."

Inflation

Data published on 10 March showed that consumer prices in China surprisingly picked up in February, but producer prices continued to fall, putting pressure on Beijing to find newer ways to support growth in the country.

Last week, China lowered its 2015 growth target to about 7%, as the nation embraces the so-called 'new normal' that emphasises quality over quantity.

At 7%, the nation's growth rate will be the lowest in about 25 years. In 2014, the economy grew by 7.5%.