China Economy Rebounds In Q1 On Strong Spending

(RTTNews) - China's economy rebounded at a faster than expected pace in the first quarter on robust consumption and industrial production, thanks to the lifting of zero-Covid policy.

Gross domestic product grew 4.5 percent on a yearly basis in the first quarter, stronger than the 2.9 percent expansion registered in the fourth quarter of 2022, the National Bureau of Statistics said Tuesday. The rate was expected to improve to 4.0 percent.

On a quarterly basis, GDP grew 2.2 percent sequentially, in line with expectations.

Retail sales logged a faster growth of 10.6 percent annually in March after rising 3.5 percent in the January to February period. The rate also exceeded economists' forecast of 7.4 percent.

Industrial production advanced 3.9 percent in March, which was slower than the 2.4 percent growth logged in January to February.

During the January to March period, the fixed asset investment increased 5.1 percent from the last year, which was weaker than the expected expansion of 5.7 percent.

The jobless rate dropped to 5.3 percent in March from 5.6 percent in February. The rate was expected to ease marginally to 5.5 percent.

As consumption remains strong, there is no immediate need for fiscal stimulus to support consumers, ING economist Iris Pang said.

Nonetheless, the government will probably consider plans of infrastructure investment as a supplementary growth engine as the external market is likely to deteriorate further this year, the economist added.

"With consumer confidence on the mend and credit growth accelerating, there is still scope for a further pick-up in activity over the coming months," Capital Economics economist Julian Evans-Pritchard said.

The official GDP growth is set to reach 6.0 percent this year, the economist observed.

Beijing had missed its growth target of 'around 5.5 percent' for last year by a bigger margin as the Chinese economy was strictly under pandemic-related restrictions.

The second largest economy in the world grew only 3.0 percent in 2022, marking the weakest expansion in decades. The government set a moderate growth target of around 5.0 percent for 2023.

The International Monetary Fund last week projected growth for China at 5.2 percent this year and 4.5 percent in 2024.