The State Information Center (SIC), a government think tank, on Monday forecast China's economy to expand by around 7.4 percent in the second quarter, with notable downward pressure and rising financial risks.

In a report in Monday's China Securities Journal, the center, which is under the National Development and Reform Commission, said China's economic slowdown is mainly an outcome of government-led initiatives such as deepening reforms and economic restructuring.

"Growth remained within a proper range," the center said.

China's growth slowed to 7.4 percent in the first quarter, marking the lowest quarterly expansion rate since the third quarter of 2012.

The SIC predicted the economy will stay on a steady yet slightly downward track in the second quarter, as growth momentum remains sluggish amid slower income growth, easing investment and weak global recovery.

The center named risks from the property market, local government debt and overcapacity as major threats to financial stability.

After years of intense growth, China's red-hot housing market is showing increasing signs of cooling down. In some cities like Hangzhou and Shanghai, there have been reports of price cuts to promote sales.

"Market expectations change and radical adjustment in the sector may lead to systematic risks that will affect related industries and broader financial and economic stability," the center warned.

It advised the government to accelerate implementation of proactive fiscal policies and flexible use of prudent monetary policies.

When necessary, China should consider lowering the reserve requirement ratio for banks, the SIC said.