Bloomberg China reported that China's industrial output grew at a slower pace than any economist forecast in October, stoking concern that the biggest contributor to global growth is running out of steam.

The statistics bureau said that production rose 8.2% from a year earlier, the smallest gain in seven years. None of 18 economists surveyed by Bloomberg News predicted such a small increase. Output grew 11.4% in September.

According to source production growth was the weakest since November 2001, after eliminating distortions in January and February each year caused by China's Lunar New Year holiday.

The slowdown may prompt the central bank to cut interest rates for the fourth time in two months to augment a USD 586 billion package of government spending on housing and infrastructure. The one year lending rate is 6.66% after three cuts totaling 81 basis points since September. China's Q3 economic expansion of 9% was the weakest in five years.

Mr Tao Dong, chief Asia economist at Credit Suisse Group AG in Hong Kong said that “China's economy is losing momentum faster than expected the central bank needs to act. We hope this is the worst quarter and things start looking better next year because of the infrastructure plan.''