In the first three months of the year, China’s economy grew faster than anticipated as the country arose from its severe Covid restrictions.
According to official data, the gross domestic product (GDP) increased by 4.5% compared to the same period last year.
The leading indicator of economic activity increased due to an increase in household expenditure and factory activity.
Beijing pledged to bolster the second-largest economy in the world when it lifted coronavirus restrictions in December.
Separate data for March released on Tuesday revealed that retail sales, the primary indicator of household consumption, increased by 10.6% year-over-year.
During the same period, factory output increased by 3.9%, which was marginally below expectations.
There were also signs of a robust recovery in the country’s airline industry.
According to data from the China Civil Aviation Administration, more than 45 million air passenger trips were conducted last month, a nearly threefold increase compared to the same time last year.
In March, the nation resumed processing visa applications after proclaiming a significant easing of restrictions.
Investors anxiously awaited the data to determine the strength of China’s economic recovery after the government lifted coronavirus restrictions.
Beijing has also loosened its three-year-long crackdown on large technology firms and real estate developers.
Even though the most recent figures are impressive, one analyst told that this rate of growth is unlikely to persist.
Dan Wang, the chief economist at Hang Seng Bank (China), predicted that in the months following the reopening, people will likely recover from the initial excitement.
“Because the global economy is slowing rather than accelerating, a decline in manufacturing demand cannot sustain an export boom,” she added.
Authorities, including the People’s Bank of China, have pledged to increase support for China’s economy to reduce unemployment, but their ability to do so is constrained.
Last year, China’s GDP growth hit a 50-year low due to coronavirus measures.
The GDP is one of the most essential tools for assessing the health of an economy. It helps businesses determine when to expand and hire more employees. And it allows governments to determine how much to spend and tax.
