China’s Economy Surpasses Expectations with 5.3% Growth in First Quarter

According to data released on Tuesday by China’s National Bureau of Statistics, the country’s economy expanded at a faster pace than anticipated in the first quarter of the year.

In the January to March period, China’s gross domestic product (GDP) grew by 5.3% compared to the same period last year, exceeding the 4.6% growth forecasted by economists surveyed by Reuters. This growth also surpassed the 5.2% expansion recorded in the fourth quarter of 2023.

Quarter-on-quarter, China’s GDP grew by 1.6% in the first quarter, outperforming the 1.4% expectation from the Reuters poll and surpassing the revised 1.2% expansion in the fourth quarter.

Beijing has set a growth target of approximately 5% for the year 2024. Morgan Stanley recently raised its 2024 real GDP forecast for China to 4.8%, up from the previous estimate of 4.2%.

Despite the strong GDP performance, China had earlier experienced weak export and inflation data this month, with both indicators falling below expectations. Industrial output in March increased by 4.5% year on year, falling short of the anticipated 6%, while retail sales grew by 3.1% year on year, lower than the expected 4.6%.

Unemployment in major Chinese cities decreased slightly to 5.2%, breaking a three-month streak of increases.

Following the release of the economic data, the offshore yuan initially strengthened before easing from its five-month high earlier on Tuesday, trading at 7.2724 against the U.S. dollar.