2023-04-17 23:05:51
© Archyde.com. FILE PHOTO: A dog crosses a road at a financial district with buildings under construction, in Beijing, China January 11, 2023. REUTERS/Tingshu Wang
By Kevin Yao
BEIJING (Archyde.com) – China’s gross domestic product likely gathered pace in the first quarter, data is expected to show on Tuesday, as the end of strict COVID curbs lifted the world’s second-largest economy out of a crippling pandemic slump, although some headwinds persist.
GDP is tipped to have risen 4.0% in January-March from a year earlier, a Archyde.com poll showed, quickening from 2.9% in the fourth quarter.
Beijing has pledged to step up support for the economy as it emerges from one of its worst performances in nearly half a century last year due to COVID curbs.
Investors are closely watching first quarter data for clues on the strength of the recovery following Beijing lifted COVID curbs in December and eased a three-year crackdown on tech firms and property.
Recent data shows the recovery remains uneven, with consumption, services and infrastructure spending perking up but slowing inflation and surging bank savings raising doubts regarding demand.
On a quarterly basis, GDP is forecast to have grown 2.2% in the first quarter, having stalled in the previous quarter.
China’s central bank said on Friday it will maintain ample liquidity, stabilise growth and jobs and focus on expanding demand.
On Monday, the central bank extended liquidity support to banks through its medium-term lending facility but kept the rate on such loans unchanged, an indication authorities are not overly concerned regarding the immediate growth outlook.
“This is an important signal that the first quarter GDP report due on Tuesday will not be too soft. But we do not expect it to be particularly strong either,” Iris Pang, chief Greater China economist at ING, said in a note.
Exports unexpectedly surged in March, data showed last week, but analysts cautioned the improvement partly reflects suppliers catching up with unfulfilled orders following COVID disruptions.
UNEVEN RECOVERY
Analysts polled by Archyde.com expect China’s growth in 2023 to speed up to 5.4%, from 3.0% last year.
The government has set a modest target for economic growth of around 5% for this year, following badly missing the 2022 goal.
The central bank cut lenders’ reserve requirements for the first time this year in March and the government has unveiled more fiscal stimulus.
GDP and activity data is due on Tuesday at 0200 GMT. Separate data on March activity is expected to show retail sales growth hitting a near three-year high and factory output also speeding up.
“The current market concerns regarding deflation largely reflect concerns regarding the strength and sustainability of the economic recovery,” Wen Bin, chief economist at China Minsheng Bank, said in a research note.
“After the optimisation of epidemic prevention and control, the production side has basically returned to the pre-epidemic level, but the demand side momentum is still weak.”
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