China’s stronger-than-expected economic growth in the first quarter has prompted economists to raise their full-year forecasts, lifting confidence about the resilience of the economy.
Several international financial institutions, including Deutsche Bank AG, JPMorgan Chase & Co and Nomura Securities Co, have revised up their prediction about the performance of the economy this year, following the release of positive economic data on April 17.
Zhang Zhiwei, chief China economist at Deutsche Bank, raised the forecast for China’s full-year GDP growth rate to 6.7 percent, saying that he did not see the immediate need for the government to launch a new round of fiscal stimulus.
China’s growth beat analysts’ expectations in the first quarter, expanding 6.9 percent year-on-year, official data showed. Details of economic activities in March also pointed to the broad-based strength of the economy across various sectors.
“March industrial production, retail sales and fixed-asset investment all came in above expectations,” said Zhu Haibin, chief China economist at JPMorgan, in a research note.
As the stronger-than-expected activity data pointed to resilient growth momentum, Zhao Yang, chief China economist at Nomura Securities, raised his forecast for the GDP growth by 0.2 percentage point to 6.7 percent.
“We believe the resilient growth in Q1 was supported more by production and investment than other factors, as growth of industrial production and fixed-asset investment both accelerated in year-on-year terms in the first quarter,” Zhao said.
China’s economy has experienced a “stunningly long period of stability” by international standards, The New York Times reported, as the economy has grown between 6.7 percent and 7.2 percent for the past 11 quarters.
In additional to revising up their growth outlook on China, some economists also believed that the strong momentum is likely to extend into the second quarter.
“China’s economy is currently expanding fairly close to the official rate,” Julian Evans-Pritchard, an economist at Capital Economics, was quoted by AFP as saying. He added that the growth “will likely extend into Q2”.
The robust growth of private consumption has been driving the strong performance of the Chinese economy, Bloomberg reported, citing data from e-commerce platform JD.com Inc.