Today, the National Bureau of Statistics released economic data for the first quarter and March. Overall, the mainland achieved rapid growth in the first quarter, exceeding market expectations, laying a solid foundation for achieving the full-year target. At the same time, however, it is worth noting that the price level remains subdued, which may indicate that demand needs to improve. Given the slowdown in some of the data in March, more policy support is expected to be on the way.
Specifically, China's real GDP grew by 5.3% year-on-year in the first quarter, significantly higher than the market expectation of 4.9%, achieving a good start to economic growth. By industry, the primary industry increased by 3.3% year-on-year, the secondary industry increased by 6.0% year-on-year, and the tertiary industry increased by 5.0% year-on-year. While the tertiary industry maintains a high boom (which can be verified from tourism, hotels, and catering), the pull of the secondary industry on the economy has also been significantly strengthened. On the price front, consumer prices (CPI) were flat year-on-year in the first quarter, and industrial producer prices fell 2.7% year-on-year, suggesting that the demand side recovered or lagged behind the supply side.
In terms of monthly data, the added value of industrial enterprises above designated size increased by 4.5% year-on-year in March, lower than the market expectation of 5.3%, and the growth rate fell by 2.5 percentage points from January to February. In March, mining, manufacturing, electricity, heat, gas and water production and supply increased by 0.2%, 5.1% and 4.9% year-on-year respectively, slowing down by 2.1, 2.6 and 3.0 percentage points respectively from January to February.
From January to March, investment in fixed assets increased by 4.5% year-on-year, 0.3 percentage points faster than that in January and February. Among them, manufacturing and infrastructure investment increased by 9.9% and 6.5% year-on-year respectively, and the growth rate accelerated by 0.5 percentage points and 0.2 percentage points respectively from January to February, while real estate investment decreased by 9.5% year-on-year, 0.5 percentage points wider than that from January to February. The acceleration of investment in the manufacturing sector may be driven by policy support such as equipment renewal. Real estate performance remains subdued, but high-frequency data shows marginal improvement.
The total retail sales of consumer goods in March increased by 3.1% year-on-year, lower than the market expectation of 4.8%, and the growth rate was 2.4 percentage points lower than that in January-February. Exports (denominated in US dollars) fell 7.5% year-on-year in March, down 13.1 percentage points from February. In March, the stock of social financing increased by 8.7% year-on-year, a decrease of 0.3 percentage points from February.
Overall, domestic economic growth in Q1 got off to a good start by beating expectations, but price data suggest that demand remains weak. Considering that the data on industrial production, social consumption, exports, and social finance slowed down in March, policy support is still needed for sustained economic recovery.
As far as the bond market is concerned, combined with economic growth and inflation, monetary policy is still easy to loosen and difficult to tighten, and there is room for further downside in financing costs. As far as the equity market is concerned, the improvement in corporate earnings comes from both growth and prices, the current growth has improved, but prices are still sluggish, policy support is expected to continue to increase, the release of the "National Nine Measures" is conducive to boosting market confidence, and the opportunities for A-shares may outweigh the risks.
#大陆一季度GDP同比增长5.3% #
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