China's economy grew at the slowest pace in 24 years at 7.4%, below the country's official target of 7.5% and 2013's 7.7% pace, as it prepares for further decline in growth rates due to the "new normal" model.

It was the first since 1998 that the government had missed a yearly growth target for gross domestic product (GDP).

Nevertheless, the GDP growth for 2014 was above market expectations of 7.3%, as the services sector outperformed driven by e-commerce, housing sales and stock market rally.

For the fourth quarter, the world's second-largest economy expanded 7.3%, unchanged from the previous quarter.

Retail sales gained 12.0% for the whole year of 2014, down from 13.0% in the prior year. Industrial production grew 8.3% in 2014, compared with 9.7% in the previous year, as heavy industry slowed significantly. In addition, fixed asset investment rose 15.7% last year, 4.2 percentage points lower than that in 2013.

Going forward, Chinese authorities will likely tolerate a slower growth rate at around 7% under the framework of "new normal" economy and will strike a balance among social, environmental, and economic targets.

"As growth slows and dis-inflation continues, further easing in the monetary policy can be expected. An eased monetary policy will facilitate Chinese corporates to de-leverage and reduce rising default risk," said economists at ANZ Bank.

"In addition, an accommodative monetary policy will also facilitate the ongoing structural reforms."

Earlier, the International Monetary Fund (IMF) slashed growth projections for China citing slowing investment growth.

The Chinese economy will expand 6.8% in 2015 and 6.3% in 2016, as per the January edition of the IMF's Global Economic Outlook, down from October projections of 7.1% and 6.8%, respectively.

China's growth is expected to come down gradually to 7.1% in 2015, 7% in 2016 and 6.9% in 2017, according to the World Bank's twice-yearly Global Economic Prospects report.