© Reuters. FILE PHOTO: A worker at Xunxi factory, a branch of Chinese e-commerce giant Alibaba, during a media tour, in Hangzhou
By Gabriel Crossley and Kevin Yao
BEIJING (Reuters) – China’s economic recovery accelerated in the first quarter following a drop caused by coronavirus at the beginning of last year, fueled by stronger domestic and foreign demand and support. Government continued to smaller companies.
Gross domestic product (GDP) rose a record 18.3% in the first quarter from a year earlier, official data showed Friday, behind economists’ forecast of 19%. polls by Reuters, and followed the 6.5% growth in the fourth quarter of last year. .
While the reading was heavily misleading due to the activity slumping a year earlier, the increase was the strongest since at least 1992, when quarterly records officially began.
“China’s Q1 is off to a good start, especially retail sales, behind the economic recovery – in the future, the focus will be on,” said Marco Sun, financial market analyst at MUFG Bank. is how to continue to grow and manage financial risks ”. Shanghai.
“When it comes to financial risk management, we can see quantitative tightening through guidance on credit growth in Q2 and possibly longer.”
Backed by stringent virus containment measures and emergency relief for businesses, the economy recovered from a sharp 6.8% decline in the first three months of 2020, when an outbreak COVID-19 in the central city of Wuhan became an epidemic.
The recovery was driven by strong exports as factories raced to fill overseas orders and steady consumption despite sporadic COVID-19 cases in some cities.
On a quarterly basis, growth slowed to 0.6% in January through March from the previous quarter-adjusted 3.2%, lacking expectations for a 1.5% increase.
Industrial output in March rose 14.1% year-on-year, slowing down from a 35.1% increase in the January-February period and lagging behind the forecast of an increase of 17.2%. with the same period last year.
Retail sales rose 34.2% year-on-year in March, beating the 28.0% increase analysts had expected and outperforming the 33.8% increase in the first two months of the year.
Investment in fixed assets rose 25.6% in the first three months compared to the same period of the previous year, compared with a forecast of 25.0% increase and slowed from a 35% increase in January-January. Two.
FOCUS ON RISK
According to a Reuters poll, the world’s second-largest economy is expected to grow 8.6%, following a 2.3% increase last year, the weakest increase in 44 years but still China. Nation became the only major economy to avoid contraction.
That should easily beat the government’s annual growth target by 2021 of over 6%.
With the economy on a solid back, China’s central bank is shifting its focus to cooling credit growth to help curb debt and financial risks, analysts said, but they are now on the way. caution to avoid rebound deviations, analysts say.
In the meantime, policymakers have vowed not to make any sudden policy changes.
Authorities are particularly concerned about the financial risks associated with the country’s overheating real estate market and have asked banks to cut their loan books this year to watch out for asset bubbles.
Separate data on Friday showed new Chinese home prices rose at a faster rate in March, even as authorities took steps to curb real estate speculation.