Mainland Economy Posts 4.5 Percent Q1 Growth

China’s gross domestic product grew 4.5 percent in the first quarter of the year, boosted by increased consumption and retail sales after the end of zero-Covid measures.

That outpaced the 2.9 percent increase in the previous quarter, according to government data released on Tuesday.

On a quarter-on-quarter basis, GDP grew 2.2 percent in January-March, in line with analyst expectations and up from a revised 0.6 percent rise in the previous quarter.

According to data published by the National Bureau of Statistics, retail sales were up 10.6 percent on-year in March, the biggest bounce since June 2021, while industrial production climbed 3.9 percent.

Raymond Yeung, Chief Greater China Economist at ANZ Bank, told RTHK the retail figures were better than expected. "I haven't seen a double-digit growth of retail sales for a long time," he said.

For the first three months of the year taken as a whole, retail sales were up by 5.8 percent and fixed-asset investment rose by 5.1 percent.

The urban unemployment rate, meanwhile, stood at 5.3 percent in March, down 0.3 percentage points from the month before.

"China's national economy made a good start this year, and market expectation saw significant improvement," said National Bureau of Statistics spokesperson Fu Linghui.

Yeung said while he remains cautiously optimistic about the economy over the next few quarters, he also said the recovery "could be very vulnerable" given the challenges ahead.

"Because of the slowdown of the US economy, and to some extent the European economy as well... Exports will not be easy to pick up this year. The March number could just be a one-off surprise," he said.

Data released earlier showed exports in March jumped a better-than-expected 14.8 percent.

Yeung also said he doesn't expect Beijing to unveil major stimulus measures, at least for the time being. "They are not going to cut the interest rate but will continue to support the liquidity in the bank market so that the credit expansion can continue."

Beijing has set a full-year growth target of around 5 percent. The economy grew by 3 percent in 2022, one of its weakest performances in decades. (RTHK/Agencies)

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