By ANDREW BATSON and TERENCE POON

Beijing -- China reported its worst quarterly economic growth in nearly two decades on Thursday, but at the same time revealed other data that hint the deepest part of the downturn may have passed amid a huge wave of government spending.

China's gross domestic product in the first quarter of 2009 rose 6.1% from the same period a year ago, the National Bureau of Statistics said, roughly in line with economists' median expectations of a 6.0% rise.

That's lower than the 6.8% expansion in the fourth quarter of 2008, and a dramatic slowdown from past growth that hit 13% for the full year 2007. "The national economy is confronted with the pressure of slowdown," the statistics bureau said in a statement on first-quarter economic data.

It cited impact from the international financial crisis, large declines in exports, profit pressures for enterprises, increasing employment difficulties and reduction in fiscal revenue as pressuring the economy.

Still, many economists say China's economic growth likely accelerated in the first quarter from the last quarter of 2008, a change that isn't apparent in the headline figure as China provides only year-on-year comparisons.

Nomura economist Robert Subbaraman said the economy likely started turning around in late February or early March. "GDP is the most rear-view mirror of all the economic statistics. If you look at the March data for [fixed-asset investment], loan growth and industrial production, they have all picked up strongly from earlier in the quarter."

Calyon economist Sebastien Barbe said first-quarter growth is likely to be the slowest pace China will see this year. "It's not going to get worse."

UBS Securities economist Wang Tao estimated that GDP in the first quarter grew around 7% from the fourth quarter on an annualized, seasonally adjusted basis.

"The stimulus policies -- both fiscal and credit expansion -- led by the government is certainly the main driver of the rebound. The full impact of those stimulus policies will be shown in the coming months," Wang said. She expects sequential growth of 12% in the second quarter.

The world's third-largest economy is being closely watched by investors for signs it will recover before crisis-stricken Western nations. Demand from China could provide support to export-dependent Asian neighbors such as Singapore and Japan, whose economies are contracting sharply. Producers of iron ore, copper and oil, from Australia to Latin America to the Middle East, are looking to China's four trillion yuan, around $585 billion, stimulus program to drive commodities demand.

China appears "on track to reach - or at least get very close" to its stated target of around 8% GDP growth in 2009, says Moody's Economy.com analyst Sherman Chan, though she warned that exports may drag. "Export prospects won't improve until the U.S. and Europe emerge from recession."

March industrial production data released on Thursday was encouraging. The key driver of China's manufacturing-heavy economy grew by 8.3% in March from a year earlier, accelerating from the 3.8% gain in January and February. Last month's rise came despite a steep fall in exports, which were down 19.7% in the first quarter from a year earlier.

The government's stimulus program has been ramping up investment to counteract the weakness in export demand. Fixed-asset investment in urban areas, China's benchmark measure of capital spending, rose 30.3% in March from the year-ago period, picking up from 26.5% growth in the first two months of this year.

The stimulus has been supported by consumer spending that has been surprisingly resilient during the global downturn. Car sales hit a monthly record in March, and home purchases and air travel both have been rising this year after sharp falls last year. In March, retail sales rose 14.7% from a year earlier, down only slightly from a 15.2% rise in January and February.

Still, concerns about deflation and excess capacity in manufacturing persist as prices continue to fall. China's consumer price index for March fell 1.2% from a year earlier, the statistics agency said, after a drop of 1.6% in February and a 1.0% gain in January.