China’s Economy Beats Expectations in First Quarter, Boosted by Policies and Demand
HONG KONG (AP) — China’s economy exceeded expectations in the first quarter of 2024, growing at a 5.3% annual pace, according to government data released on Tuesday. This growth outperformed analysts’ forecasts of about 4.8% and marked a 1.6% increase from the previous quarter.
The world’s second-largest economy has been grappling with the aftermath of the COVID-19 pandemic, with a slowdown in demand and a property crisis hindering its recovery. However, the latest data shows signs of improvement.
Industrial output for the first quarter was up 6.1% compared to the same period last year, while retail sales grew at an annual pace of 4.7%. Fixed investment also saw a 4.5% increase year-on-year.
China economist Louise Loo of Oxford Economics attributed the better-than-expected performance to “broad manufacturing outperformance,” increased household spending during the Lunar New Year holidays, and supportive government policies aimed at boosting investments.
Despite the positive data, Loo warned of potential weaknesses in the coming months, citing factors such as an unwinding of excess inventory and a normalization of post-holiday spending. She also highlighted the unpredictable nature of external demand conditions, as evidenced by March’s sharp export underperformance.
In response to the ongoing challenges, Chinese policymakers have introduced a series of fiscal and monetary measures to stimulate the economy. China has set a GDP growth target of 5% for 2024, underscoring its commitment to achieving sustainable economic growth.
Overall, the latest economic data indicates a promising start to the year for China’s economy, but uncertainties remain as the country navigates through a complex global economic landscape.