China’s economic recovery quickened sharply in the first quarter from a coronavirus-induced slump earlier last year, propelled by stronger demand at home and abroad and continued government support for smaller firms.
Gross domestic product (GDP) jumped a record 18.3% in the first quarter from a year earlier, official data showed on Friday, slower than the 19% forecast by economists in a Reuters poll, and following 6.5% growth in the fourth quarter last year.
While the reading is heavily skewed by the plunge in activity a year earlier, the increase is the strongest since at least 1992, when official quarterly records started.
“China’s Q1 started good, especially in retail sales, which was behind the economic recovery – going forward, the focus point would be how to continue the growth and manage the financial risk,” said Marco Sun, chief financial markets analyst at MUFG Bank in Shanghai. “Speaking of managing the financial risk, we are likely to see quantitative tightening via guidance on credit growth in Q2 and maybe longer.”
Aided by strict virus containment measures and emergency relief for businesses, the economy has recovered from a steep 6.8% slump in the first three months of 2020, when an outbreak of COVID-19 in the central city of Wuhan turned into a full blown epidemic.
The recovery has been led by export strength as factories raced to fill overseas orders and a steady pickup in consumption that comes despite sporadic COVID-19 cases in some cities.
