The mainland’s gross domestic product (GDP) surged 18.3% year-on-year in the first quarter, with foreign media citing a report from major bank Goldman Sachs that China’s V-shaped recovery is over after recording record growth in the previous quarter and that the Chinese economy is expected to return to trend growth.
Goldman Sachs economists said China’s economy appears to have passed an inflection point, and the policy focus has shifted from helping the economy recover from the epidemic-hit slump to addressing long-term stability and growth issues. The bank added that the high growth rate in China’s first quarter was underpinned by wide variations across sectors and changing drivers of growth.
Even though retail sales in China improved in March, economists see no strong signs that household consumption will pick up in the near term, and the household savings rate remained high in the first quarter. On the other hand, demand for Chinese-made personal protective equipment is expected to likely weaken as the global economy recovers and reopens, with non-epidemic-related goods expected to drive export performance this year.
With the economy performing solidly, Goldman Sachs expects the People’s Bank of China to keep policy rates unchanged and credit growth to decelerate slowly through the end of the year.
Recent Comments