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China's Q1 GDP to grow at around 4%

China Daily| Updated: April 4, 2023 L M S

China's major economic indicators have continued to improve since the start of the year. With stronger market expectations, the country's economic development is picking up. A number of economists believe that China's economic recovery will see a strong momentum, expecting GDP growth in the first quarter to be around four percent on a yearly basis, according to a report by Securities Times on Monday.

Industrial output increased by 2.4 percent year-on-year in the first two months, and the service sector production index rose by 5.5 percent on a yearly basis in the same period.

In March, the manufacturing PMI remained at a high level and the non-manufacturing PMI continued to rise. Regarding the low base in the same period last year, the year-on-year economic growth may further accelerate, said Bian Quanshui, chief macroeconomic researcher at Western Securities.

The economic recovery since the year's beginning has been better than expected, Bian said, adding that GDP growth in the first quarter is likely to be higher than expected, at around 3.4 to 4 percent.

GDP growth in the first quarter is expected to be around 4.0 percent year-on-year, 1.1 percentage points higher than that in the fourth quarter of 2022, said Feng Lin, a researcher with Golden Credit Rating.

The rapid recovery of household consumption and the high growth of infrastructure investment in the first quarter are the main driving forces for the economic recovery in the first quarter, Feng said, adding that resilient manufacturing investment and the diminishing drag effect of real estate investment have all boosted the economic growth.

Rising market demand is also playing a certain role in boosting confidence in manufacturing investment, which will remain resilient in the short term, the researcher said.

According to a research report by Great Wall Securities, GDP in the first quarter is projected to rebound to around 4.3 percent, of which government consumption expenditure and capital formation, important supporting forces for the economic recovery in the first quarter, will be about 0.8 percentage points and 2 percentage points, respectively.

As domestic consumption is key to economic growth, macro policies need to continue to boost consumption, stabilize investment and boost market confidence, Feng added.