The Chinese dragon was surprised. There is new economic data from the Middle Kingdom

According to the data you published China, the Middle Kingdom's GDP rose by 5.3% in the first three months of 2024. On an annual basis, After an increase of 5.2 percent in the last quarter of 2023. This result exceeded the expectations of analysts who expected an increase of 4.6 percent. On a quarterly basis, the Chinese economy grew by 1.6%. An increase of 1 percent was expected.

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The reading was commented on by mBank experts. “March retail sales and industrial production data were not responsible for the surpriseJ – These rates surprised the decline (3.1% on an annual basis versus 4.6% on an annual basis and 4.5% on an annual basis versus 6% on an annual basis, respectively).

This result had to be achieved mainly in the first two months of the year. As long as the growth target is achieved near 5%. It seems very likely after the result in the first quarter (the other thing is that the authorities always get the result they want), and the March data certainly does not lead to a sudden outbreak of optimism. However, we emphasize that growth forecasts for this year were too low and we will face upward revisions, which are already being announced slowly – as we read in the comments.

The first quarter economic data gives the Chinese authorities reasons to be satisfied, with the official GDP growth target of “about 5 percent.” It seems to be within reach. However, as Harry Murphy-Crews of Moody's Analytics pointed out in an interview with the BBC, to achieve this goal it is necessary to increase domestic demand and the willingness of Chinese consumers to spend.

Meanwhile, data for March published by the Chinese Bureau of Statistics show that retail sales increased by only 3.1%, much lower than expectations (4.6%) and much slower than in February (5.5%). This indicates that Chinese authorities plan to make economic growth increasingly dependent on domestic consumption, not on exports, has not yet achieved the expected results. Without significant participation from families in driving growth and maintaining it at about 5 percent. It may be difficult in the long run.

Bruce Pang, chief economist at investment firm JLL, expects the government's measures will aim to increase investments in equipment and facilities. This would provide temporary support for domestic demand and enable the annual GDP growth target of about 5% to be achieved.

The average forecast for China's GDP for 2024, compiled by Bloomberg, indicates growth of 4.7%, with individual forecasts ranging from 4%. Up to 5.2 percent

Economic data for March show that Chinese industrial production growth slowed from 7%. In February to 4.6 percent, retail sales slowed from 5.5 percent. As much as 3.1 percent Real estate prices fell by 2.2 percent in March. On an annual basis, after February's 1.4% decline.

As Zichun Huang, an economist at research firm Capital Economics, points out, the crisis in the real estate sector remains one of the main problems facing the Chinese economy. Despite the continuing decline in housing sales, the correction in the construction sector has only just begun. This will affect the country's economic growth.

It is worth noting that in March, during the opening of China's annual National People's Congress, the authorities officially maintained last year's GDP growth target of about 5%. In 2024.