China’s economic growth accelerated in the latest quarter as consumers flocked back to shops and restaurants following the abrupt end of anti-virus controls in the country.
The 4.5 percent annual growth in GDP from January to last month was the fastest in the past year, and outpaced the 2.9 percent growth in the previous quarter, according to government data released yesterday.
However, authorities said that China would likely face import and export pressures in the coming months amid an uncertain international economic environment, and warned of inadequate domestic market demand in the world’s No. 2 economy.
Photo: Reuters
Chinese National Bureau of Statistics Director-General Fu Linghui (傅令輝) said that authorities would implement policies to “stabilize growth” and stimulate domestic demand, as well as help support the development of emerging industries.
The higher-than-expected rise in GDP for the quarter came amid a rebound in consumption, as people flocked to shopping malls and restaurants after Beijing’s “zero COVID-19” restrictions were removed at the end of last year.
Analysts initially pegged economic growth to be about 4 percent.
Last month, total retail sales of consumer goods rose 10.6 percent annually, and grew 7.1 percentage points compared with the first two months of the year.
“The combination of a steady uptick in consumer confidence as well as the still-incomplete release of pent-up demand suggest to us that the consumer-led recovery still has room to run,” Oxford Economics Ltd economist Louise Loo (盧姿蕙) said in a note.
However, while consumption and retail sales have grown, other economic indicators with weaker growth, such as industrial output and fixed-asset investments, indicate an uneven recovery. Slowing price indices also point toward inadequate demand.
Industrial production output, which measures activity in the manufacturing, mining and utilities sectors, last month grew 3.9 percent from a year earlier.
Fixed-asset investment — in which China invests in infrastructure and other projects to drive growth — rose 5.1 percent annually, slowing down from 5.5 percent in the first two months.
Private investments were also weak, growing just 0.6 percent.
Investors are expected to scrutinize China’s first-quarter economic data for indicators of recovery following years of harsh lockdowns and a crackdown on industries such as technology and real estate.
Last year’s GDP growth fell to 3 percent, hampered by anti-virus controls that caused snap lockdowns and kept millions at home, sometimes for weeks on end.
GDP is expected to accelerate on an annual basis given Shanghai’s COVID-19 lockdowns last year, which affected the economy, Loo said, adding that growth is expected to slow down in the second half of the year.
“The fading of consumption momentum, the winding down of fiscal stimulus, and a weaker incoming external demand would put downward pressure on domestic growth in H2,” she said.
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