(Bloomberg) -- China’s economy soared in the first quarter as consumer spending strengthened, joining production and investment in recovering from the Covid slump a year ago.
Gross domestic product climbed a record 18.3% in the first quarter from a year earlier, largely in line with the 18.5% predicted in a Bloomberg survey of economists. The figures released by the statistics bureau Friday are skewed by comparisons from a year ago when the economy was in lockdown. A better reading of the economy’s momentum comes from quarter-on-quarter growth, which slowed to 0.6% from 2.6% in the previous three months.
China’s economy steadily picked up pace after an historic contraction in the first quarter of last year, recovering all its lost ground by the end of September. The rebound has been led by strong industrial output and robust exports as the pandemic fueled demand for Chinese-made medical goods and electronic devices.
Bumper GDP growth, rising inflation and soaring debt levels have put policy makers on guard. Beijing has signaled it wants to scale back fiscal and monetary stimulus now that the recovery is gathering pace, and is tightening regulatory oversight in areas such as lending and real estate. The central bank has asked banks to curtail loan growth in coming months, though officials have stressed a gradual tapering of policy.
Globally, the rollout of vaccines is helping to bolster the world economy and underpinning China’s growth. On top of that, the Biden administration’s massive fiscal stimulus is expected to have huge spillovers for the rest of the world, especially in China, the world’s biggest exporter. Bloomberg Economics’ Chang Shu upgraded her growth forecast for China for this year to 9.3% from 8.2% previously. The government’s official target is for growth above 6% this year.
©2021 Bloomberg L.P.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.