BEIJING -- China's economic growth has started to stabilize, the State Council said in a statement on Thursday, quoting Premier Wen Jiabao's recent talks on economic conditions.

Positive changes in the economy have been seen in the third quarter, said Wen, adding that he is confident that China can reach its annual growth target.

China's economy expanded by 7.7 percent year-on-year in the first three quarters, higher than the 7.5-percent annual economic growth target set for 2012, according to the statement.

Special coverage: China Economy by Numbers - Sept

In the third quarter, the economy expanded 7.4 percent year-on-year, slowing from 7.6 percent in the second quarter and 8.1 percent in the first, the National Bureau of Statistics announced Thursday.

The gross domestic product reached 35.35 trillion yuan ($5.61 trillion) during the first three quarters of 2012, NBS spokesman Sheng Laiyun said at a news conference.

In the first three quarters of this year, China's retail sales grew 14.1 percent year-on-year to 14.94 trillion yuan, while fixed asset investment rose 20.5 percent year-on-year to 25.69 trillion yuan, Sheng said, adding that the country's industrial value-added output grew 10 percent year-on-year.

China will continue its proactive fiscal policy and prudent monetary policy in the fourth quarter, according to Premier Wen.

In order to buoy growth, China's central bank has cut banks' reserve requirement ratio twice and lowered benchmark interest rates this year.