China Reports Q1 Economic Growth of 5% Outpaces Analyst Forecasts

China's Economy Defies Expectations Amid Global Uncertainty

China's economic growth has surpassed expectations in the first quarter of the year, according to official data released by the National Bureau of Statistics (NBS) on Thursday. The country's Gross Domestic Product (GDP) expanded by 5.0 percent year-on-year in January-March, outpacing a forecast of 4.8 percent made by AFP based on a survey of economists.

The strong GDP reading is a welcome respite for Beijing, which is aiming for overall economic growth of 4.5-5.0 percent this year - a target that represents the lowest growth rate in decades. The Chinese government has been relying on exports to meet its growth targets, given the prolonged crisis in the property sector and a persistent slump in domestic spending.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

While China's diversified energy supply may shield it from immediate shocks caused by the global energy price surge, experts warn that a potential global downturn could weaken demand for its exports. The global economy is reeling from the fallout of the war in the Middle East, with energy prices surging in response to the US-Israeli conflict on Iran. The war has stymied shipping through the Strait of Hormuz, through which a fifth of the world's oil and gas passes.

In other data released by the NBS, retail sales grew by 1.7 percent year-on-year in March, missing a Bloomberg forecast of 2.4 percent. However, industrial production rose by 5.7 percent, beating a Bloomberg forecast of 5.3 percent but slowing from 6.3 percent in January and February combined.