Despite the struggles to recover from the COVID-19 pandemic, China’s economy showed resilience in the first quarter of the year, with growth surpassing analysts’ forecasts. The country’s GDP expanded at an annual pace of 5.3% in January-March, compared to a forecast of 4.8%. Compared to the previous quarter, growth increased by 1.6%. This was driven by a combination of policies and increased demand.
Industrial output for the first quarter increased by 6.1% compared to the same period last year, while retail sales grew at an annual pace of 4.7%. Fixed investment also experienced growth, up 4.5% compared to the previous year. This growth was supported by strong performance in manufacturing, increased household spending during the Lunar New Year holidays, and supportive policies aimed at boosting investments.
Economist Louise Loo of Oxford Economics emphasized that while first quarter growth was robust, there are signs of weakness in March following the Lunar New Year holidays. External demand conditions also remain unpredictable, as evidenced by a decline in export figures for the month. Factors such as inventory adjustments, normalization of post-holiday spending, and cautious stimulus measures will influence growth in the second quarter.
In response to economic challenges, policymakers have implemented a range of fiscal and monetary policy measures to stimulate growth. China has set a GDP growth target of 5% for 2024 as part of its efforts to support the economy
