China's Economy Accelerates in 2023 with 5.4% Growth Forecast
China's economic growth is expected to accelerate in 2023, with analysts predicting a rise to 5.4% after last year's 3.0% growth. The government has taken steps to boost the economy, including increasing the budget deficit target and allowing more local government bond issuance for infrastructure projects. The end of strict COVID-19 curbs has also contributed to the recovery.
China's exports unexpectedly surged in March, though analysts warn that this partly reflects suppliers catching up on unfulfilled orders due to the pandemic. Consumption and services have picked up, with retail sales growth accelerating to 10.6% in March, the highest in nearly two years. However, factory output has lagged due to weak global growth and COVID-19 related disruptions. On a quarter-on-quarter basis, China's GDP grew 2.2% in January to March, in line with expectations. Last year, GDP growth slumped to one of its worst levels in nearly half a century due to COVID-19 curbs. In the first quarter of 2023, China's economy grew 4.5% year-on-year, faster than the previous quarter's 2.9% and beating analyst forecasts. The People's Bank of China (PBoC) has been providing liquidity and support to the banking system to maintain growth and jobs amidst the COVID-19 pandemic.
China's economy is showing signs of recovery, with growth accelerating in the first quarter of 2023. The government's fiscal and monetary policies, along with the lifting of COVID-19 curbs, have contributed to this improvement. However, analysts caution that exports may not sustain their recent surge, and factory output remains weak due to global headwinds and COVID-19 related disruptions. The PBoC continues to provide support to the economy, focusing on expanding demand.
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