China’s economy beat expectations in the first quarter, growing 4.8 percent year on year, government data showed on Monday, amid mounting fears of a sharp slowdown due to Beijing’s “zero-COVID” policies and the Ukraine war.
The world’s second-largest economy had been forecast to grow 4.4 percent in the January-March period, according to a Reuters poll of economists, up from 4 percent in the last quarter of 2021. Gross domestic product (GDP) rose 1.3 percent over the period on a quarter-on-quarter basis.
China’s industrial output increased 5.0 percent in March compared to a year earlier, while retail sales shrank 3.5 percent.
While boosting Beijing’s prospects of hitting its ambitious target of 5.5 percent growth in 2022, the stronger-than-expected figures only cover a small period of the continuing ultra-strict lockdown in Shanghai, where residents have faced food shortages and factories have suspended operations.
“The worst hasn’t been taken into account yet,” Carlos Casanova, senior economist for Asia at UBP in Hong Kong, told Al Jazeera.
“January-February activity was stronger than expected. Together with robust external demand, that helped to support manufacturing. However, we are able to see the impact of lockdown measures in March retail sales, which were contractionary. We expect to see subdued activity in April and May, which will drag on Q2 growth.”
Alicia García-Herrero, chief Asia Pacific economist at Natixis in Hong Kong, also raised questions about the accuracy of strong economic data in January and February.
“Excellent Jan/Feb data on fixed asset investment does not really match the poor electricity and cement data for January and February,” García-Herrero told media.