China’s Economy Soars by Record a Year After Pandemic Slump

  • Bloomberg
  • Economic Indicators News
China’s Economy Soars by Record a Year After Pandemic Slump
Credit: © Reuters.

(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.

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