(Yicai Global) April 7 -- China’s economy is likely to have expanded 4.5 percent in the first quarter from the same period last year, more than the 4 percent logged in the fourth quarter last year, as a robust economic performance in January and February makes up for a slowdown in March, according to a new report.

A resurgence in Covid-19 in some parts of the country and ongoing global geopolitical unrest have taken their toll on March’s performance, according to a report released by UK lender Standard Chartered yesterday.

The retail sales of consumer goods is likely to slide 3.8 percent in March from a year earlier, compared to a gain of 6.7 percent in January and February, the London-based bank said.

Fixed-assets investment will probably climb 8.2 percent in the three months ended March 31 year on year thanks to accelerated investment in infrastructure, but this is still a big drop from the 12.2 percent posted in the first two months, the report said.

The consumer price index, a key gauge of inflation, is likely to rise 1.6 percent last month from the same period last year and the producer price index, a measure of industrial profits, will probably gain 7.5 percent because of the low base numbers in 2021 and the surge in global energy prices, it said.

Exports will jump 14 percent last month year on year and imports 5.5 percent, both a slowdown from the first two months, the report said. March’s trade surplus will be around CNY33 billion (USD5.2 billion), less than the CNY116 billion achieved in the previous two months, it said.

The central bank will probably cut the reserve requirement ratio by another 50 base points and the medium-term lending facility rate by 10 base points by the middle of this year to release enough liquidity into the market, guide financing costs further downward and create a sound environment for the issuance of government bonds, it said.

M2 broad money is likely to rise 9.2 percent last month from a year ago, new credit loans will stand at CNY2.84 trillion (USD446.4 billion) and new social financing CNY3.7 trillion, both more than in February, the report said.

The purchasing managers’ index for the manufacturing sector stood at 49.5 in March, down from 50.2 in February, the lowest since November last year, according to the latest statistics. The production and new orders sub-indexes fell 0.9 percentage point and 1.9 point to 49.5 and 48.8 respectively, both below the benchmark of 50, indicating contraction. The PMI for the service sector slid to 46.7.

Editor: Kim Taylor