(Yicai) April 16 -- China's gross domestic product expanded 5.3 percent in the first three months from a year earlier, and 1.6 percent from the previous quarter, beating market expectations, as the economy gets back on track, according to the latest data.

China’s GDP was CNY29.63 trillion (USD4.17 trillion) in the three months ended March 31, according to figures released by the National Bureau of Statistics today.

"The national economy has got off to a good start and recovery has achieved a sustained momentum,” said NBS Deputy Director Sheng Laiyun. Positive factors such as rising demand, stable employment and prices as well as growing market confidence are driving economic recovery and laying a good foundation for full-year growth.

The economy in the first quarter performed better than expected, mainly due to earlier cuts to the benchmark lending rate, the loan prime rate and to the reserve requirement ratio, said Wang Qing, chief macro analyst at Golden Credit Rating.

Growth in manufacturing and infrastructure investment maintained a fast clip, even though some key indicators dropped in March as the effect of this year's Spring Festival boom and low baseline at the end of last year waned, the NBS said.

On the supply side, the added value of industrial enterprises above a designated size jumped 6.1 percent in the three months ended March 31 from a year ago. This is despite a slowdown in March, when growth was 4.5 percent, 2.5 percentage points slower than in January and February.

On the demand side, total retail sales of consumer goods climbed 4.7 percent over the period. Again, growth slowed in March to 3.1 percent, a 2.4 percentage point drop from the first two months.

The recent subsidies for consumer good trade-ins and equipment updates will soon start to boost demand, Wang said. Spending on services and investment in manufacturing grew rapidly thanks to internal growth. Overseas demand has also picked up from the beginning of the year due to cyclical factors and other reasons.

Fixed-asset investment, excluding rural households, climbed 4.5 percent in the first quarter year on year to CNY10 trillion (USD1.3 billion), an improvement of 1.5 percentage point from 2023, thanks to greater investment in infrastructure and manufacturing. But investment in property development plunged 9.5 percent. When excluding real estate, fixed asset investment increased by 9.3 percent.

The extra CNY1 trillion (USD138.1 billion) of special government bonds that were issued at the end of last year and other fiscal instruments that are likely to be released soon will provide additional financial support for infrastructure, said Wu Chaoming, deputy director of the Chasing International Economic Institute. Infrastructure investment is likely to grow around 8 percent this year.

Thanks to the encouraging data, several foreign investment firms have been raising their forecasts for China's economy. US investment bank Goldman Sachs recently upped its forecast for China’s first-quarter GDP growth to 7.5 percent from 5.6 percent, and that for the whole year to 5 percent from 4.8 percent. Citigroup has also raised its economic growth forecast for 2024 to 5 percent from 4.6 percent.

China's GDP expanded 5.2 percent in 2023 from the year before and this year’s target has been set at around 5 percent.

Editor: Kim Taylor