(Yicai Global) March 15 -- China’s consumption rebounded more than expected and investment growth climbed in the first two months of this year, official figures showed.

Total retail sales of consumer goods rose 3.5 percent to more than CNY7.7 trillion (USD1.1 trillion) in January and February from a year earlier, according to the data the National Bureau of Statistics released today.

The improvement in consumption was the highlight of a strong overall economic performance in the first two months, NBS spokesperson Fu Linghui said.

Offline consumption including catering picked up rapidly, helped by local governments issuing spending vouchers to residents and financial institutions boosting consumer credit, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating. People also spent the excess savings they accumulated last year, Wang noted.

Anticipating higher employment and rising income levels this year, Fu said the negative impact of the Covid-19 pandemic on consumption will lessen over time.

China’s fixed-asset investment totaled nearly CNY5.4 trillion (USD782.8 billion) in the first two months, a 5.5 percent increase from a year ago and up 0.4 percentage point compared with last year’s growth rate, the NBS data showed.

Infrastructure investment rose 9 percent, 0.4 point lower than the gain in 2022, while manufacturing investment advanced 8.1 percent, down 1 point.

The construction of infrastructure projects progressed steadily in January and February, with plenty of projects and strong financial support, said Lian Ping, head of the Zhixin Investment Research Institute. Manufacturing investment grew steadily, Lian said, and private firms had improved operation but faced pressure from falling exports.

In the context of the global economic slowdown and China’s greater export challenges, investment confidence in private investment-oriented manufacturing industry is likely to be affected to a certain extent, Wang said.

In addition, since the fourth quarter of last year, China’s producer price index has stayed in a deflationary range, and many manufacturing enterprises have been hit by lower profits, which will also have a negative impact on investment, he said.

Editor: Tom Litting