China's economy expanded by 6.1 percent year on year in the first quarter, official data showed on Thursday.

The quarterly growth rate was the lowest in 10 years as the global financial crisis continued to affect the world's fastest-growing economy. It was 4.5 percentage points lower than the first quarter of 2008 and down 0.7 percentage points from the previous quarter.

Gross domestic product (GDP) reached 6.5745 trillion yuan (US$939 billion) in the first quarter, Li Xiaochao, spokesman of the National Bureau of Statistics (NBS), told a press conference.

Positive signs

Li said the government's stimulus measures had produced positive results and the first quarter performance was better than expected.

First-quarter industrial output grew 5.1 percent year on year with a rise of 8.3 percent in March. Fixed asset investment rose 28.8 percent year-on-year to 2.81 trillion yuan. Deducting price factors, the real growth exceeded 30 percent.

In the first two months, investment in new projects rose 87.5 percent from the same period of last year, with that in the railway transport sector more than doubled.

Agriculture production was expected to continue increasing. The acreage of grain crops for the whole year was forecast to rise for a sixth consecutive year and reach 1.08 trillion hectares.

Retail sales grew 15 percent to 2.94 trillion yuan. The consumer price index, a main gauge of inflation, fell 1.2 percent year on year in March, compared with a decline of 1.6 percent in February, the first monthly fall since December 2002.

The per capita disposable income of urban residents rose 10.2 percent to 4,834 yuan for the first quarter. Deducting price factors, the increase reached 11.2 percent. That of rural residents also climbed 8.6 percent to 1,622 yuan.

Sales of auto and home appliances were increasing. According to China Association of Automobile Manufacturers, the country's auto sales hit 2.68 million units in the first quarter, the highest in the world. Sales of home appliances in March were up 72 percent from February to 2.24 billion yuan, according to the Ministry of Commerce.

Power consumption, an important indicator of industrial activity, posted smaller declines. It dropped 3.49 percent in March, compared with an 11.37-percent decline in December last year.

Zhang Liqun, a researcher with the Development Research Center of the State Council, said statistics for March trade, real estate sales and fiscal revenue showed positive signs. The effects of the government's stimulus package would become more evident in the second quarter.

Remaining difficulties

"We should not be too optimistic about these changes as the economic outlook is still grave," said Wang Tongsan, an economist with the Chinese Academy of Social Sciences (CASS).

The NBS spokesman said the main difficulties for an economic recovery included the slumping export demand, falling company profits and fiscal revenue, and unemployment pressure.