Beijing: China’s economy accelerated for a second straight quarter, as investment picked up, retail sales rebounded and factory output accelerated in March.
Gross domestic product increased 6.9% in the first quarter from a year earlier, compared with a 6.8% median estimate in a Bloomberg survey.
Other indicators released Monday by the National Bureau of Statistics showed:
• Fixed-asset investment excluding rural areas expanded 9.2% for the first three months, accelerating from an 8.1% expansion last year
• Retail sales increased 10.9% from a year earlier in March, compared with a median estimate of 9.7% in a Bloomberg survey
• Industrial output rose 7.6% last month from a year earlier, compared with an estimated 6.3% rise
“For the first time in the recent years, China starts a year with a strong headline GDP,” said Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong, who correctly forecast the growth pace. “Thanks to strong investment and property, the economy is performing well.”
The expansion further cements a rebound as producer prices surge, industrial output picks up and investment is fuelled by surging credit. Policy makers have shifted to a more neutral monetary stance as they seek to ease financial risk and reduce excess industrial capacity.
Despite recent property tightening measures, investment momentum is likely to stay strong in the coming months amid heavy infrastructure investment. The 1 April announcement of the new Xiongan economic zone portends massive construction spending and suggests authorities are likely to remain reliant on investment to help support longer-term growth.
Investment in property development rose 9.1% in the first three months from a year earlier, compared with 8.9% in the first two months and 6.9% in 2016. Yet developers may find 2017 more challenging, as about a dozen cities have imposed tighter restrictions on purchases to curb a frenzy of speculation.