Q1 Economic Growth Rate 5.3%... Exceeds Forecast
However, March Indicators Show Some Weakness
"More Support Needed for Economic Recovery"
China's first-quarter economic growth rate exceeded 5%, showing a solid trend, but signs of weakening growth momentum appeared in March. The market is calling for more proactive economic stimulus and support measures.
On the 16th, the National Bureau of Statistics of China announced that the first-quarter gross domestic product (GDP) reached 29.6299 trillion yuan (approximately 5702.8668 trillion won), a 5.3% increase compared to the previous year. This figure not only surpassed expert forecasts (4.8%) and the previous month's figure (5.2%) but also exceeded last year's overall economic growth rate (5.2%) and the fourth-quarter growth rate (5.2%).
The National Bureau of Statistics explained, "The national economy had a good start in the first quarter as more positive factors accumulated," adding, "It laid a relatively good foundation for achieving the annual goals and tasks."
This growth rate exceeded even internal expectations within China. The Chinese economic media Caixin reported that, based on a survey of 14 domestic and international institutions, economists predicted a 4.9% year-on-year GDP growth rate for the first quarter of this year.
Ding Shuang, Chief Economist for Greater China at Standard Chartered Bank, told the Hong Kong South China Morning Post (SCMP), "Rapid growth in the service sector and increased overseas demand driving export growth in the industrial sector have fueled this growth momentum."
However, the economic indicators released on the same day for March showed a somewhat sluggish trend. According to the National Bureau of Statistics, China's industrial production in March increased by 4.5% year-on-year. This figure fell short of both market expectations (5.4%) and the previous months' figure (January-February, 7.0%). Industrial production aggregates the total output of factories, mines, and public utilities, reflecting manufacturing trends. It is also used as a leading indicator for employment and average income.
Domestic consumption also fell short of expectations. China's retail sales in March increased by only 3.1% year-on-year, underperforming both the forecast (5.1%) and the previous months' figure (January-February, 5.5%). The unemployment rate improved slightly to 5.2% from the previous month (5.3%) and met expectations. On a cumulative basis for the first quarter, industrial production rose 6.1%, and retail sales increased 4.7% year-on-year. Fixed asset investment in the first quarter grew 4.5% year-on-year, but real estate development investment fell 9.5%, indicating that the related market remains in a cooling phase.
Charu Chanana, a foreign exchange strategist at Saxo Capital Markets, told Bloomberg News, "China's indicators appear strong, but the details are weak," adding, "This means more support is needed for the economy, and the market will continue to move toward yuan depreciation."
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