Get estimated GDP in the first quarter in China by 5.4 % with continued growth momentum amid tariff concerns

The Chinese economy expanded a better rate than expected by 5.4 % in the first quarter, while maintaining a strong momentum, even with the threats of the American tariffs leading to reducing major investment banks to reduce the country’s annual growth expectations.

GDP in the first quarter topped the Reuters poll forecast for 5.1 % on an annual basis, based on the recovery that began in late 2024, thanks to the batch of a wide policy incentive.

Retail sales in March increased by 5.9 % on an annual basis, According to the data of the National Statistical Office On Wednesday, he won the analysts’ estimates of 4.2 % growth. Industrial product expanded by 7.7 % from the previous year, compared to average estimates of 5.8 %.

Fixed asset investments with 4.2 % in the first quarter against 4.1 % increase in the Reuters poll. However, the withdrawal from real estate worsened within the investment of fixed assets, a 9.9 % decrease for this year as of March, while the infrastructure and investment in manufacturing increased.

The urban unemployment rate decreased to 5.2 % in March, after a Top level for two years at 5.4 % In February.

The Chinese Economy Office described as “a good and fixed start” and confirmed how “innovation) plays an increasingly leading role.” The Chinese company Deepseek revealed in January in January by penetrating artificial intelligence, which is based on technology from OpenAi, in the United States.

But the office warned that “the external environment has become more complicated and intense” and that the local demand has been insufficient.

Despite the optimistic monthly data in March, “the damage caused by the trade war will appear in the macro data next month,” said Zoyoui Zhang, president and chief economist in PinPoint Asset Management, noting that “high frequency indicators indicate that HAS exports slowly slowed in the region.”

The Chinese leadership set an ambitious annual growth goal for “about 5 %” this year, a goal that is more seen in achieving the prospects of the escalating trade war and the PersiansR.Fullly local consumption.

“We must implement more active and effective Macro’s policies, expand and enhance the local economy … and actively respond to uncertainty in the external environment,” said the statistics office in an English version.

The tariff war with the United States brought the total fees imposed by US President Donald Trump on Chinese goods to 145 %, which led to revenge from Beijing to raise the fees on American goods to 125 %. These levels are expected to give up import duties in China’s exports and address several percentage points from the expansion of the economy this year.

“It is possible that growth will deteriorate quickly from the second quarter given the possibility of bilateral negotiations in the near term to create a violation of a 125 % tariff,” a team of economists in Morgan Stanley said in a note earlier this week.

Many investment banks have Reducing growth expectations in China This year, although most economists doubt Beijing will achieve its official goal, citing the opposite winds of the large increase in American definitions on Chinese goods.

On Tuesday, UBS Group added to a series of growth cuts with pessimistic expectations between major banks, with the expectation that the Chinese economy will expand only 3.4 % this year as US tariffs suffocate exports. The Investment Bank exports China to the United States to decrease by two thirds in the upcoming seasons, with a 10 % decrease in dollars in dollars this year.

The pressure on Chinese officials was built to launch more powerful stimulus to support local consumption and the housing market, while reducing the economy’s dependence on exports and investment.

Robin Xing, the chief economist in Morgan Stanley, expects that the Chinese authorities will give up the cash mitigation steps in the second quarter, with a reduction of 50 points in the rate of reserve requirements and the reduction of 15 points in interest rates.

Beijing is likely to accelerate the issuance and publication of local construction bonds and increase the consumer commodity trade program with wider coverage or generous benefits, in addition to pushing local governments to housing inventory, according to Morgan Stanley.

Xing also expects that Beijing will reveal an additional financial stimulation of 1-1.5 trillion yuan in the second half of the second year to provide a partial displacement of the shock of customs tariffs.