In the first quarter of 2024, China’s economy experienced robust growth with a 5.3% increase compared to the same period in 2023. This surpassed the forecast of analysts and the growth rate recorded in the fourth quarter of 2023. The National Bureau of Statistics announced these positive figures, highlighting that the industrial sector played a significant role in contributing to over one-third of this growth.
However, a closer examination of the data reveals some areas of concern. Retail sales in March only rose by 3.1% compared to last year, falling short of the expected 4.8% growth. Additionally, industrial output also missed predictions by coming in at 4.5%. Louise Loo, China economist at Oxford Economics, suggests that there may be challenges ahead for China’s economy due to the struggling property market which continues to experience a debt crisis and youth unemployment data not being included in the report due to changes in methodology for calculating it by Beijing.
Looking forward, there are concerns about household spending stabilizing and excess inventory being released during the second quarter of 2024. Despite setting a growth target of around 5.0% for this year, potential headwinds on the horizon may challenge pace of growth making it an evolving situation and updates on China’s economic performance will be forthcoming as we monitor this closely.