Despite the ongoing struggles to recover from the impact of the COVID-19 pandemic, China’s economy surpassed expectations in the first quarter. The country’s economic growth rate was 5.3% in January-March, an impressive increase from the previous quarter and a 1.6% rise from analysts’ forecasts of 4.8%.
The strong growth was driven by a 6.1% increase in industrial output, a 4.7% growth in retail sales, and a 4.5% rise in fixed investment compared to the same period last year. These gains were supported by various fiscal and monetary measures implemented by policymakers to stimulate the economy and achieve a GDP growth target of 5% for 2024.
Economist Louise Loo of Oxford Economics attributed the first quarter’s strong growth to manufacturing outperformance, increased household spending during the Lunar New Year holidays, and supportive policies for investment. However, Loo cautioned that indicators in March and unpredictable external demand conditions could lead to weakness in the second quarter.
The government is focused on sustaining economic growth while navigating challenges such as a property crisis and fluctuations in demand. Policymakers have implemented various measures to address these challenges, including targeted fiscal support for specific industries and regions, as well as monetary policy tools such as interest rate cuts and liquidity support for financial institutions.
Overall, China’s better-than-expected economic performance in the first quarter highlights its resilience in the face of global challenges and underscores its potential for continued growth in the future with proper management of its economy by policymakers.
