China’s economy grew at a faster than expected clip in the first quarter, official data showed on Monday, expanding 4.8% year-on-year, but the risk of a sharp slowdown over coming months has risen as sweeping COVID-19 curbs and the Ukraine war take a toll.
Gross domestic product (GDP) had been forecast to expand 4.4% from a year earlier, according to a Reuters poll of analysts, picking up from 4.0% in the fourth quarter last year.
On a quarter-on-quarter basis, GDP rose 1.3% in January-March, compared with expectations for a 0.6% rise and a revised 1.5% gain in the previous quarter.
Heightened global risks from the war in Ukraine, widespread COVID-19 lockdowns and a weak property market are putting a choke hold on the world’s second-largest economy, and some economists say the risks of a recession are rising.
The government’s determination to stop the spread of record COVID-19 cases has clogged highways and ports, stranded workers and shut countless factories – disruptions that are rippling through global supply chains for goods ranging from electric vehicles to iPhones.
Late on Friday, the People’s Bank of China announced it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity to cushion a sharp slowdown in economic growth.
China has targeted slower economic growth of around 5.5% this year as headwinds gather, but some analysts say that may now be tough to achieve without more aggressive stimulus measures.