European markets failed to lift off on Monday morning after China reported 2013 economic growth of 7.7% on a par with revised figures for 2012, but still representing a huge shift from the years of double-digit growth.
European markets followed Asian indices slightly lower, but won’t have their usual cue from Wall Street this afternoon, with US markets closed for the Martin Luther King public holiday. Britain’s FTSE 100 was flat at 6,823.
The news that China’s economy beat the government’s 7.5% forecast for 2013 will do little to cheer economists and investors who worry whether the country’s authorities can managed to steer a path to greater domestic consumption and less dependence on investment.
The official data today also showed that China’s economy grew 7.7% in the fourth quarter from a year earlier, down from 7.8% growth in the previous three months. Industrial production and retail sales both slowed in December, the data also showed.
Concerns remain about attempts to rein in credit growth in China amid fears of a renewed credit crunch. ‘With credit conditions likely to remain relatively tight, we expect investment spending and economic growth to slow further in 2014,’ commented Mark Williams, an economist at Capital Economics.
Investors had several pieces of weekend news to weigh up alongside the China data. Moody’s upgrading Ireland’s credit rating to Baa with a positive outlook. And Deutsche Bank last night reported a 1.2 billion euro fourth quarter loss.