MORE FINE-TUNING EXPECTED
The slowdown came as the world's second largest economy implemented measures to cool inflation and its property market and struggled with a persistently sluggish external market.
Official data showed that investment in the property sector rose 23.5 percent year-on-year in the first quarter, down from 44.1 percent last year. Foreign trade grew 7.3 percent during the same period, registering the slowest pace since the fourth quarter of 2009.
"The government should adopt more active fine-tuning monetary policies as inflation pressure becomes a less important issue," said Zhang Liqun, a researcher with the development research center of the State Council.
Zhang said the country needs to properly adjust its monetary policy to meet credit demands, as investment dropped in the country's infrastructure construction sector and was unstable in the manufacturing sector hit by shrinking exports.
The government has already moved to strengthen its support for the real economy, with its new yuan loans trumping forecasts to hit a 14-month high of 1.01 trillion yuan in March, central bank data showed.
"The country will continue to fine-tune its monetary policy by injecting more liquidity, but the policy will stay prudent in general as consumer prices rebounded in March," said Wang Yuwen, a researcher at the finance research center of Bank of Communications.
The country's consumer price index, a main gauge of inflation, rose 3.6 percent year-on-year in March, up from a 20-month low of 3.2 percent in February.
Wang expected a 50-basis-point cut in banks' reserve requirement ratio (RRR) in the second quarter and two more later this year, but said that interest rates will likely stay unchanged.
To ease the credit crunch, the central bank in February cut the RRR by 50 basis points, the second cut in three months.