China’s Economy Outperforms Expectations with Faster Growth in March Quarter

China’s economy grew faster than expected in the first quarter, data showed on Tuesday, offering some relief to officials as they try to shore up growth in the face of protracted weakness in the property sector and mounting local government debt.

However, several March indicators released alongside the gross domestic product data – including property investment, retail sales and industrial output – showed that demand at home remains frail, weighing on overall momentum.

The world’s second-largest economy grew 5.3 per cent in January-March from the year earlier, official data showed, comfortably above a 4.6 per cent analysts’ forecast in a Reuters poll and up from the 5.2 per cent expansion in the previous quarter. On a quarterly basis growth picked up to 1.6 per cent from 1.4 per cent in the previous three months.

“The strong first-quarter growth figure goes a long way in achieving China’s ‘around 5 per cent’ target for the year,” said Harry Murphy Cruise, economist at Moody’s Analytics.

Analysts have described as ambitious the growth target Beijing aims to accomplish with help of fiscal and monetary stimulus measures, noting last year’s growth rate of 5.2 per cent was likely flattered by a rebound from a COVID-hit 2022.

Furthermore, China’s Economic Growth outpacing expectations underscores the nation’s pivotal role in driving global economic recovery. As the world’s second-largest economy, China’s performance has far-reaching implications for global markets and trade dynamics. The resilience and dynamism of China’s economy serve as a stabilizing force in the face of ongoing global uncertainties. China’s proactive measures have bolstered its swift recovery from the pandemic-induced slowdown. Looking ahead, continued efforts to enhance economic resilience, promote innovation, and deepen structural reforms will be essential for China to navigate future challenges and maintain its position as a key engine of global growth.
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