Hong Kong
CNN
–
China’s economy had a solid start in 2023, since consumers get used to a wave of expenses after three years of strict pandemic restrictions ended.
The Gross Domestic Product grew 4.5% in the first quarter for a year, cordination to the National Statistics Office on Tuesday. That exceeded the estimate or 4% growth of a survey of reuters economists.
But private investment barely moved and youth unemployment increased to the second highest registered level, indicating that employers in the country’s private sector still have caution over Long -term perspectives.
Consumption published the strongest rebound. Retail sales increased 10.6% in March from a previous year, the highest growth level since June 2021. In the months of January to March, retail sales grew by 5.8%, mainly high due to an increase in revenues of the catering service industry.
“The combination of a stable UPICK in consumer confidence, as well as the release of accumulated demand for combination, suggests that the recovery led by the consumer still has space to run,” said Louise Loo, the main economist of Oxford Economics of China.
Industrial production also showed a constant increase. It was 3.9% in March, compared to 2.4% in the period from January to February. (China usually combines its economic data for January and February to take into account the impact of the holidays of the lunar new year).
Last year, GDP expanded by Fair 3%, losing a lot of the official growth target of “around 5.5%”, such as the Beijing approach to eliminate the coronavirus caused ravages in supply chains and consumer spending.
After Mass Street’s protests grabbed the country and local governments ran out of cash to pay huge Covid bills, the authorities finally discarded the Covid Zero policy in December. After a period of interruption of the letter due to an increase in Covid, the economy begins to buy recovery signs.
Last months, an official meter or a non -manufacturing activity jumped at its highest level in more than a decade, suggesting that the country’s crucial services sector benefited from a resurgence in consumer spending after the end of pandemic restrictions.
As economic recovery gains traction, investment banks and international organizations have improved China’s growth forecasts for this year. In its global economic perspective published last week, the International Monetary Fund said that China is “recovering” after the reopening of its economy. The country’s GDP will grow 5.2% this year and 5.1% in 2024, predicted.
However, some analysts believe that the strong growth reported in the first quarter was the product of the “retracting” of economic activity from the fourth quarter of 2022, which was heavy due to pandemic restrictions and then a chaotic reopening.
“Our central opinion is that China’s economy is deflationist,” said Raymond Yeung, Chinese chief economist in Anz Research, in a research report on Tuesday.
If adjustments are made to take into account the impact of late economic activity, GDP growth in the first quarter could have a bone of only 2.6%, he said.
Some key data published on Tuesday support this idea. For example, private investment was extremely weak.
The investment of fixed assets by the private sector increased only 0.6% from January to March, indicating a lack of trust among entrepreneurs. (Meanwhile, state -directed investment, advanced 10%). That is equally worse than the 0.8% growth recorded in the period from January to February.
The Chinese government has resorted to surprising measures to restore confidence among private entrepreneurs, but the campaign has inspired more nervousness than optimism.
The most important real estate industry is also mired in a deep recession. The investment in property decreased 5.8% in the first quarter. Property sales per floor area decreased by 1.8%.
“The national economy is recovering well, but the limitations of insufficient demand are still obvious,” said Fu Linghui, spokesman for the NBS, at a press conference in Beijing on Tuesday. “The prices of industrial products are still falling, and companies face many difficulties in their profitability.”
Unemployment continued to increase Among young people.
The unemployment rate for young people aged 16 to 24 reached 19.6% in March, to a third consecutive month. It was the second highest registered, only behind the level of 19.9% reached in July 2022.
The high unemployment rate among young people suggests “slack in the economy,” Yeung said.
“For June, there will be a new lot of graduates looking for jobs. The unemployed condition could lead even more if China’s economic impulse,” he added.
The Ministry of Education of China has previously estimated that a record of 11.6 million university graduates will seek jobs this year.
At the last month of the National Popular Congress, the country’s gum stamps parliament, the Government established a cautious growth plan for this year, with an objective of the GDP of around 5% and a job creation objective of 12 million.