China’s economy grew faster than expected in the first three months of the year, a boost for policymakers grappling with a property-sector crisis, weak consumer demand and mounting government debt.

Gross domestic product (GDP) grew by 5.3 percent in the first quarter, data released by the National Bureau of Statistics (NBS) showed on Tuesday, comfortably above forecasts and up from a 5.2 percent expansion in the previous quarter.

By sector, industrial production and agriculture grew by 6.1 percent and 3.8 percent, respectively, while services grew by 5 percent, according to NBS data.

The NBS said in a statement that the economy had made a “good start” under “the strong leadership” of the Central Committee of the Communist Party of China and President Xi Jinping.

“As a result, the policies continued to take effect, production and demands maintained stable and witnessed an increase, employment and prices were generally stable, market confidence continued to boost, and high-quality development made new progress,” the statistics agency said.

The stronger-than-expected figures came days after China reported that exports and imports declined 7.5 percent and 1.9 percent, respectively, in March, missing expectations.

The world’s second-largest economy has struggled to sustain a recovery from the COVID-19 pandemic amid a range of longstanding structural challenges, including a hugely indebted real estate sector and a shrinking population.

Fitch Ratings earlier this month downgraded China’s sovereign credit outlook to negative, citing “increasing risks to China’s public finance outlook” as Beijing attempts to move away from real estate-led growth.

Beijing last month set a 5 percent growth target for 2024, a rate that would beat most developed economies but be among the country’s slowest expansions since 1990.

Officials have unveiled a number of fiscal and monetary policy measures to boost the economy, including $1.8 trillion in spending on major construction and infrastructure projects.

Adblock test (Why?)

Source link

HONG KONG (AP) — China’s economy expanded at a faster than expected pace in the first three months of the year, helped by policies aimed at stimulating growth and stronger demand, the government said Tuesday.

The world’s second-largest economy expanded at a 5.3% annual pace in January-March, beating analysts’ forecasts of about 4.8%, official data show. Compared to the previous quarter, the economy grew 1.6%.

China’s economy has struggled to bounce back from the COVID-19 pandemic, with a slowdown in demand and a property crisis weighing on its growth.

The better-than-expected data Tuesday came days after China reported its exports sank 7.5% in March compared to the year before, while imports also weakened. Inflation cooled, reflecting deflationary pressures resulting from slack demand amid a crisis in the property sector.

Industrial output for the first quarter was up 6.1% compared to the same time last year, and retail sales grew at an annual pace of 4.7%. Fixed investment, in factories and equipment, grew 4.5% compared to the same period a year earlier.

The strong growth in January-March was supported by “broad manufacturing outperformance,” festivities-boosted household spending due to the Lunar New Year holidays and policies that helped boost investments, according to China economist Louise Loo of Oxford Economics.

“However, ‘standalone’ March activity indicators suggest weakness coming through post-Lunar New Year,” she said. “External demand conditions also remain unpredictable, as seen in March’s sharp export underperformance.”

Loo noted that an unwinding of excess inventory, normalization of household spending after the holidays and a cautious approach to government spending and other stimulus will affect growth in this quarter.

Policymakers have unveiled a raft of fiscal and monetary policy measures as Beijing seeks to boost the economy. China has set an ambitious gross domestic product (GDP) growth target of about 5% for 2024.

Such strong growth usually would push share prices across the region higher. But on Tuesday, Asian shares fell sharply after stocks retreated on Wall Street.

The Shanghai Composite index lost 1.4% and the Hang Seng in Hong Kong lost 1.9%. The benchmark for the smaller market in Shenzhen, in southern China, lost 2.8%.

Stronger growth in the region’s biggest economy normally would be seen as a positive for its neighbors, which increasingly rely on demand from China to power their own economies. However, strong growth figures are also viewed as a signal that the government will hold back on further stimulus.

Zen Soo, The Associated Press

Adblock test (Why?)

Source link

Over the weekend, Iran launched a direct attack on Israel. Although Israel successfully intercepted the drones and missiles, the potential for an Israeli retaliation remains uncertain. David Blumberg of Blumberg Capital joins Yahoo Finance to discuss the state of the Israeli economy in light of these developments.

Blumberg claims that Israelis are “somewhat used to these types of things.” Blumberg notes that over the past 25 years, the country has weathered numerous crises, but has achieved consistent growth. He points to Israel’s GDP per capita of $54,000, which exceeds that of some of the world’s largest economies, as evidence of the economy’s ability to “thrive despite and through downturns.”

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Angel Smith

Video Transcript

JOSH LIPTON: Over the weekend, Iran launched its first ever direct attack on Israel with a salvo of hundreds of drones and missiles. David Blumberg is currently in Israel where his venture capital firm Blumberg Capital has offices and investments. David joins us now for more on the state of the Israeli economy and tech community. David, it is great to see you and have you on the show.

DAVID BLUMBERG: Thank you so much, Josh. Great to see you as always.

JOSH LIPTON: So David, you’re in Israel now. You were obviously there over the weekend during this Iranian attack. So David, I just first want to know how you’re doing.

DAVID BLUMBERG: You can see I’m fine. I’m happy. I feel safe.

With my team here on the ground, we had a meeting with about 20 of our portfolio companies last night. We did it by Zoom instead in meeting. But people are very resilient here.

The streets, you can’t see them. They’re full of people at restaurants. The clubs are– the clubs are busy, traffic jams happening.

It’s remarkable how normal it is in a time when, I think, in America or other places, if this happened, people would be really freaking out. Israelis are unfortunately somewhat used to these kinds of things. This is the most severe it’s ever been. But they really did a great job with the Americans, the British, and the Jordanians, and French to knock down 99.9% of all the projectiles. So I think people feel like they won this battle.

Story continues

JOSH LIPTON: And so David, the Israeli people a resilient community. At the same time, you know, David, they are engaged in this three-front war. It’s Iran. It’s Hamas to the south. It’s Hezbollah to the north.

It’s an enormous economic burden for the country, David. You just think of soldiers being called up and the tens of thousands of Israelis displaced in the north because of Hezbollah. How does the economy sustain this, David?

DAVID BLUMBERG: Well, I like to always look for history, Josh. So as we recall, over the last 25 years, there have been four or five war conflict situations plus COVID plus the dotcom crash plus a number of other financial crises, et cetera. So if we look at that, we see that over those 25 years, the Israeli GDP per capita measure of productivity of every individual working grew 2% to 3% faster than OECD countries during that same period pretty consistently.

Now, there were downturns and then they’ve come back. But over time, you see this growth. And in fact, I was looking at the data recently, in 2023, Israel achieved GDP per capita of $54,000. Now, that is higher than France, higher than the UK, and higher than Japan, which surprised me to see that growth. Because Israel, when I first started coming here, was a much poorer country.

But the tech boom in particular has really bolstered the economy. And as you’re asking, it seems to thrive despite and through downturns. There are downturns here, but the next year they get stronger.

Adblock test (Why?)

Source link