China’s Q1 GDP growth: Strong year-on-year growth amid weak momentum

In Short

This morning, China’s statistical office published its Q1 2021 GDP growth estimate alongside with other monthly real activity data for March. GDP growth accelerated from 6.5% yoy in the final quarter of last year to 18.3% yoy.

Highlights:

  • China’s Q1 GDP growth accelerated to 18.3% yoy while the growth momentum was the lowest on record (except Q1 2020).
  • We expect it to normalise in Q2 while yoy growth could cool into a range of 7% to 8% yoy.
  • These fluctuations are embedded into a generally less supportive monetary and fiscal stance.
  • The PBoC already slowed money expansion. We expect the bulk of withdrawal of fiscal support only after the 100th anniversary of the Chinese Communist Party on July 1.

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China’s Q1 GDP growth: Strong year-on-year growth amid weak momentum
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