The economy registered growth of 7.7 percent year-on-year in the first three months, down from 7.9 percent in the fourth quarter of 2012.

Sheng Laiyun, spokesman for the National Bureau of Statistics, said that the first quarter was a "sound and steady" start to the year, and the nation's economic fundamentals have remained strong.

"We are optimistic," he said, about achieving the annual GDP growth target of 7.5 percent because the job market has continued generating new opportunities and there has been a steady increase in incomes.

The World Bank lowered its growth forecast for the world's second-largest economy on Monday to 8.3 percent in 2013, slightly lower than its previous prediction of 8.4 percent.

JPMorgan also lowered its annual growth prediction to 7.8 percent from 8.2 percent.

"China's economy will show a moderate pace of growth in 2013, although the economy will continue the long-term downward trend in its growth potential," said Zhu Haibin, chief China economist with JPMorgan.

In the first quarter, industrial output rose 9.5 percent, 2.1 percentage points lower than the growth a year earlier, and half a percentage point lower than the whole of 2012.

Fixed-asset investment grew 20.9 percent, the same as in the first quarter of last year. It contributed 2.3 percentage points out of the 7.7 percent first quarter growth, down from 3.9 percentage points of the 7.8 percent growth in 2012.

Retail sales of consumer goods rose 12.4 percent, down from 14.8 percent growth a year earlier. About 55.5 percent of the economic growth was from consumption, the NBS said.

The benchmark Shanghai Composite Index dropped for the third consecutive day, down 1.13 percent on Monday to close at 2181.94, the lowest since Dec 25.

"Weak indigenous impetus, especially sluggish industrial production, was the main force that restrained economic recovery," said Tang Jianwei, a senior macroeconomic analyst with the Bank of Communications.

Investment expansion in the manufacturing sector was 18.7 percent year-on-year, reaching the lowest level in a decade, Tang said.

Zhu Qingguo, chairman of the Guangdong Textile Industry Association, said: "Last year was the worst year for the textile industry in the past decade with a sharp decrease in orders for manufacturers."

"The industry is trying to fight back slowly this year although the overall economy hasn't recovered yet," he said.

The complicated international economic situation and the faltering recovery have influenced China's growth, the NBS spokesman said.

"The increasingly fierce quantitative easing monetary policy in many developed economies added currency appreciation pressure and reduced exports in emerging economies," Sheng said.

Jan-Egbert Sturm, director of the think tank KOF Swiss Economic Institute, said the slower recovery in the European countries facing crises is of less concern to the Chinese economy than one might think, "as most of the trade between the EU and China relates to countries like Germany".

JPMorgan economist Zhu predicted that the eurozone is likely to come out of the recession in the second half of this year, which may help stabilize China's exports.

Zhang Zhiwei, chief economist in China with Nomura Securities, said the policy is unlikely to loosen further, considering the current high debt level and the associated financial risks, which may slow growth toward 7.3 percent in the second half.

"However, any GDP rate below 7.5 percent would push policymakers to loosen policy and stimulate growth," he said.