US LNG exports surge but will buyers in China turn up?
Investing.com -- China’s economy grew faster than expected in the first quarter, dimming hopes for imminent policy easing as authorities appear inclined to assess further data before introducing new stimulus measures, according to Bank of America (BofA).
Gross domestic product expanded by 5.4% year-on-year in the first quarter, beating the 5.2% consensus forecast and matching the pace of the previous quarter.
The upside surprise came “as net exports strengthened due to stockpiling and retail sales held up on the back of consumer subsidies,” according to BofA economists.
Meanwhile, nominal GDP growth slowed to 4.6%, pointing to continued deflationary pressures.
Sequential growth moderated to 1.2% from 1.6% in the fourth quarter.
“The upside surprise in Q1 GDP and March activity growth suggests that the Chinese economy was in decent shape in 1Q before trade tensions escalated quickly in April,” BofA economists said in a note.
They emphasize that consumer spending is recovering, while industrial output has been sustained by front-loaded export orders and robust investment in manufacturing and infrastructure.
March activity data reinforced the strength in the economy. Industrial production rose 7.7% year-on-year, significantly above the 5.9% expected, while retail sales climbed 5.9%, also surpassing forecasts.
Fixed asset investment rose 4.3%, underpinned by policy-driven gains in infrastructure and manufacturing spending.
Property investment, however, remained a drag, contracting by 10% year-on-year.
With these solid figures, BofA expects caution from policymakers in the near term, noting that strong Q1 growth “tempers near-term stimulus expectations.”
While authorities may pause fresh stimulus for now, the bank’s economists warned of growing risks ahead. “We expect imminent downside risks to materialize on exports and investment in 2Q25, against the onset of the trade war,” the economists wrote.
However, they believe that policymakers will delay easing in April following solid growth data and “continue to watch and assess demand strength in May–June before considering rolling out additional policy stimulus.”
China’s labor market showed modest improvement, with the urban unemployment rate edging down to 5.2% in March.