© Reuters. FILE PHOTO: A worker works at the Xunxi factory, a subsidiary of Chinese e-commerce giant Alibaba, during a media tour in Hangzhou
BEIJING (Reuters) – China's economic recovery likely accelerated sharply in the first quarter due to a coronavirus-induced slump early last year, driven by stronger domestic and international demand and continued government support for smaller businesses.
The data released on Friday is likely to show that gross domestic product (GDP) rose 19% year over year in the first quarter, after expanding 6.5% in the final quarter of 2020, according to a survey by Reuters.
While the reading will be heavily skewed by the slump in activity a year earlier, the expected jump would be the strongest since at least 1992, when official quarterly records began.
With the help of tough virus containment measures and emergency aid to businesses, the economy has steadily recovered from a steep 6.8% plunge in the first three months of 2020 as an outbreak of COVID-19 in downtown Wuhan became one full blown epidemic became.
The recovery was led by export strengths as factories strained to fulfill overseas orders and consumption soared despite sporadic COVID-19 cases in some cities.
On a quarterly basis, growth from January to March is likely to have slowed from 2.6% in the previous quarter to 1.5%, according to the survey.
China released Q1 GDP data on Friday (0200 GMT), as well as March factory production, retail sales and property, plant and equipment investments.
Industrial production in March is expected to increase 17.2% year over year and slow from a 35.1% increase in the first two months. Sales growth in March is likely to cool from 33.8% in January to February to 28%.
Analysts polled by Reuters expected the world's second largest economy to grow 8.6% in 2021, accelerating from 2.3% last year to its strongest performance in a decade.
That would slightly exceed the government's annual growth target of over 6% this year.
With the economy back on solid foundations, China's central bank is focusing on cooling credit growth to contain debt and financial risks. However, it is proceeding cautiously so as not to detract from the recovery, analysts said. Policy makers meanwhile have vowed not to make sudden policy changes.
Authorities are particularly concerned about financial risks affecting the country's overheated property market and have asked banks to cut their loan books this year to protect themselves from asset bubbles.
Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading losses you may incur as a result of using this data.
Fusion Media or any person involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information contained on this website, such as data, offers, charts and buy / sell signals. Please inform yourself comprehensively about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.