China beats growth expectations, GDP increased by 4.5% in the first quarter of 2023.

China beats growth expectations, GDP increased by 4.5% in the first quarter of 2023.
China's president Xi Jinping

China is back on high growth rate digits as Covid-19 restrictions relax in the country. The main driver of the GDP growth was the increase in consumer spending and the restart of factory production.

Another measurement that justifies the GDP growth is the retail sales index that shows the amount of household spending. According to China's Bureau of Statistics, on Tuesday, this metric jumped 10.6% in March 2023 in comparison with March 2022.

As it was stated in our previous article, the International Monetary Fund (IMF) warned the world that economic growth will slow down to 2.8% in 2023 and signs like the unexpected growth of China can change the situation. Afterall, China remains the second largest economy in the world despite its hard 2022 economic results of just below 3% GDP growth.

Finally it seems that China's administration decided to abandon its Zero Covid policy that caused heavy financial impacts. In addition, Xi Jinping's government is taking action by increasing investments in infrastructure and manufacturing with an increase of 8.8% and 7% from last year, respectively.

Unemployment rate among ages 25-59 also had an improvement falling from 4.8% in February to 4.3% in March, although youth unemployment (16-24) increased to 19.6% in March compared to 18.1% in February.

Airlines also got back on track with 45 million passengers just in the previous month, a 3X increase from last year.

China's economy is rebounding after almost three and a half years of consecutive lockdowns and harsh restriction policies. A rebound that will play an important role to the global economic growth and the future of financial stability and stock markets.

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