China Q1 GDP Growth Surpasses Expectations at 5.3%
China's economy outperformed expectations in the first quarter of 2024, posting a 5.3% growth from the previous year, as reported by the National Bureau of Statistics. This expansion surpassed the forecasted 5.2% growth for the fourth quarter of 2023 and the median estimate of 4.8% by a Bloomberg survey. The growth was primarily driven by a robust performance in the services sector and an increase in overseas demand that boosted the industrial sector's exports.
Despite the positive start to the year, there are several challenges that the Chinese economy faces. Retail sales experienced a slower growth of 3.1% year-on-year, and property investment saw a significant decline of 9.5%. The ongoing trade tensions with the United States and Europe continue to present uncertainties. Moreover, while the first-quarter results have been strong, Standard Chartered Bank predicts a more modest growth rate of 4.8% for the entire year due to potential headwinds in the second half.
The government has set a growth target of around 5% for 2024, which reflects the ambition to sustain economic momentum amidst a property market slump and concerns over mounting local government debts. To maintain this growth trajectory, analysts anticipate that further stimulus measures may be necessary. On a quarter-on-quarter basis, China's GDP saw an increase of 1.6%, exceeding the 1.4% growth expectation and outpacing the revised 1.2% gain from the previous quarter.
