China’s economy expands at torrid pace in first quarter
China’s economy continued its torrid growth in the first three months of the year, with gross domestic product expanding 11.9% compared with the same period a year ago, China’s National Bureau of Statistics announced Thursday.
Analysts say the robust growth could spur the Chinese government to boost its efforts to control inflation and cool an overheated real estate market. Measures such as interest rate hikes and a small appreciation of the currency could be in store.
“The acceleration in growth argues for further policy tightening,” said Ben Simpfendorfer, chief China economist for the Royal Bank of Scotland in Hong Kong.
China’s consumer price index, a key measure of inflation, rose 2.4% in March compared with March 2009. In February inflation was 2.7%. Inflation traditionally decelerates the month after Chinese New Year as food prices drop with lower demand.
The producer price index rose 5.9% in March compared with the same month a year ago -- a reflection of rising commodity prices and China’s continued appetite for raw materials to fuel development.
Officials said policymakers would now have to finesse credit expansion and stimulus measures to ensure sustained growth.
“With the implementation of the stimulus package to combat the global financial crisis, the Chinese economy achieved a good start this year as the recovery momentum continues to consolidate, laying a solid foundation to meet” growth targets, said Li Xiaochao, a spokesman for China’s statistics bureau.
He added, “We will also make policy setting more flexible and targeted according to developments.”