China says economy grew 5% on-year in Q1, beating forecasts

China’s economic growth beat expectations in the first quarter of the year, even as the global economy reeled from the fallout from the war in the Middle East, official data showed on Thursday.

According to data published by the National Bureau of Statistics (NBS), gross domestic product in the world’s second largest economy increased by 5.0 percent on an annual basis in the January-March period.

This figure was slightly above AFP’s estimate of 4.8 percent, based on a survey of economists.

Beijing expects overall economic growth this year to be 4.5-5.0 percent, the lowest in decades.

The years-long crisis in the real estate sector and the persistent decline in domestic spending have left leaders dependent on exports to achieve growth targets.

NBS data also showed on Thursday that retail sales grew 1.7 percent year-on-year in March, missing Bloomberg’s forecast of 2.4 percent.
Industrial production rose 5.7 percent, beating Bloomberg’s forecast of 5.3 percent, but slowing from a total of 6.3 percent in January and February, the NBS said. The closely watched data came as global energy prices rose in response to the US-Israeli war against Iran, which is blocking shipping through the crucial Strait of Hormuz, through which a fifth of the world’s oil and natural gas passes.

Diversification of China’s energy supply protects it from sudden shocks, but a potential global downturn caused by war could weaken demand for China’s exports, experts say.