China’s economy grew faster-than-expected in the first quarter, data showed, offering some relief to officials as they try to shore up growth in the face of protracted weakness in the property sector and mounting local government debt.

The government has unveiled fiscal and monetary policy measures in a bid to achieve what analysts have described as an ambitious 2024 GDP growth target of around 5 per cent, noting that last year’s growth rate of 5.2 per cent was likely flattered by a rebound from a Covid-hit 2022.

Gross domestic product (GDP) grew 5.3 per cent in January-March from the year earlier, data released by the National Bureau of Statistics showed, comfortably above analysts’ expectations in a Reuters poll for a 4.6 per cent increase and slightly faster than the 5.2 per cent expansion in the previous three months.

On a quarter-by-quarter basis, GDP grew 1.6 percent in the first quarter, above the forecast for growth of 1.4 percent.

The world’s second-largest economy has struggled to mount a strong and sustainable post-Covid bounce, burdened by a protracted property downturn, mounting local government debts and weak private-sector spending.

Fitch cut its outlook on China’s sovereign credit rating to negative last week, citing risks to public finances as Beijing channels more spending towards infrastructure and high-tech manufacturing, amid a shift away from the property sector.

The government is drawing on infrastructure work – a well-used playbook- to help lift the economy as consumers are wary of spending and businesses lack confidence to expand.

China’s consumer inflation cooled more than expected in March, while producer price deflation persisted, pointing to subdued domestic demand and reinforcing market calls for more stimulus to spur demand.

The economy was off to a solid start this year, but March data on exports, consumer inflation and bank lending showed that momentum could falter again.

Separate data on factory output and retail sales, released alongside the GDP report, also showed momentum is slowing.

Industrial output in March grew 4.5 per cent from a year earlier, compared with a forecast increase of 6.0 per cent and a gain of 7.0 per cent for the January-February period.

Growth of retail sales, a gauge of consumption, rose 3.1 per cent year-on-year in March, against a forecast increase of 4.6 per cent and slowing from a 5.5 per cent increase in the January-February period.

Fixed asset investment grew an annual 4.5 per cent over the first three months of 2024, versus expectations for a 4.1 per cent rise. It expanded 4.2 per cent in the January-February period.