HONG KONG (AP) — chinese The economy accelerated in the first quarter of this year, expanding by 5% year-on-year as it largely avoided the effects of the global economy. iran war So far, according to data released Thursday.
The government’s statistics for the period from January to March, covering the outbreak of the Iran war, exceeded economists’ expectations and exceeded the 4.5% growth in the October-December period.
Economists expect China to be able to weather the short-term fallout from the Iran war, which is now in its seventh week. Energy prices have soared due to the war. worsening inflation and impact global economic growth. But in the longer term, sectors including global demand for China’s exports could be hurt.
The International Monetary Fund this week revised down its forecast for China’s economic growth in 2026 to a 4.4% expansion. Last month, Chinese leaders set a target for economic growth this year of 4.5% to 5%, the lowest since 1991.
“China is likely to be able to weather the short-term disruption, but a prolonged war and prolonged high energy prices are likely to start hurting growth by the second half of this year,” said Lin Song, chief economist for Greater China at Dutch bank ING.
Years of downturn in China’s real estate sector have dented consumer and investor confidence, but the country managed to meet its goals. Growth of “approximately 5%” The trade surplus reached a record level last year, supported by strong exports. Approximately $1.2 trillion Despite US President Donald Trump’s tariff hikes.
“Without a swift resolution to the Iran war, global economic growth is likely to slow, which will have a negative impact on other countries’ ability to absorb Chinese exports,” said Eswar Prasad, a professor of economics and trade policy at Cornell University.
On Tuesday, China reported: Exports increased by 2.5% in March Compared to a year ago, there was a significant slowdown from the previous two months.
“At a time when countries are trying to protect their businesses, households and economies from the fallout from the Iran war, demand for Chinese imports is clearly contracting,” he said.
Economists say China still has a good chance of achieving its economic growth target of 4.5% to 5% this year through policy stimulus, but there are other concerns.
Prasad said higher public sector investment would stabilize headline growth, but unless household demand strengthened significantly, potential deflationary pressures would increase and the economy could become more export-dependent in the future.
