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Business News/ Economy / China's Q1 GDP grows 5.3% Y-o-Y, beats forecast of 4.6%, but concerns remain
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China's Q1 GDP grows 5.3% Y-o-Y, beats forecast of 4.6%, but concerns remain

As per a Reuters' poll, analysts expected first-quarter gross domestic product (GDP) to expand 4.6% from a year earlier, compared to 5.2% in the previous quarter.

China's GDP: The stronger-than-anticipated economic performance comes as China aims for around 5 per cent growth for the full year 2024.Premium
China's GDP: The stronger-than-anticipated economic performance comes as China aims for around 5 per cent growth for the full year 2024.

China's economy grew 5.3 per cent in the first quarter year-on-year, official data showed on April 16. As per the data, China beat analysts' expectations by a mile, as policymakers try to shore up demand and confidence in the wake of a protracted property crisis, Reuters reported.

On a quarter-on-quarter basis, the country's GDP expanded by 1.6% in the January-March period, surpassing the forecast of a 1.4% increase, and the previous quarter's revised 1.2 per cent gain, the Reuters report added.

The stronger-than-anticipated economic performance comes as China aims for around 5 per cent growth for the calendar year 2024, a target that many analysts have deemed ambitious and requiring additional stimulus measures.

While the overall picture is positive, some underlying concerns remain. March data showed a slowdown in industrial output and retail sales growth, compared to the January-February period, indicating potential weaknesses in consumer demand and business confidence.

Additionally, the property sector, a crucial driver of the Chinese economy, continues to struggle, with investment declining 9.5% year-on-year in the first three months of 2024.

Analysts were divided in their assessments of the latest GDP figures. Some viewed the data as a "ray of shining light" that could support a rebound in Chinese equities, while others warned that the heavy reliance on the property market could lead to deeper economic challenges, including the risk of deflation.

The government has unveiled a slew of fiscal and monetary policy measures in an effort to achieve its growth target, with a focus on infrastructure investment and high-tech manufacturing. However, concerns persist about the sustainability of this approach and the need to address underlying issues, such as weak consumer sentiment and the property market downturn.

As China navigates these economic headwinds, policymakers will be closely monitoring the trajectory of the country's economic recovery and the effectiveness of their policy interventions in the months ahead.

(With Inputs from Reuters)

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Published: 16 Apr 2024, 08:20 AM IST
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