China’s economy grew at its fastest pace since the third quarter of 2015, boosted by higher infrastructure spending, strong industrial output and robust credit growth.
Gross domestic product grew 6.9 percent in the first quarter, slightly faster than expected. Analysts polled by Reuters had expected a growth of 6.8 percent. The world’s second largest economy has accelerated for a second-straight quarter.
"The first quarter growth is mainly driven by reflation and very strong property sales and investment," said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong. "This strong data would give more confidence to maintain a tightening stance."
Chinese government has a target of around 6.5 percent growth in 2017, below its target of 6.5-7 percent last year. The economy grew at 6.7 percent in 2016, the weakest pace in 26 years.
Fixed-asset investment rose 9.2 percent in the first quarter, compared with 8.1 percent growth last year. Real estate investment remained strong, expanding by 9.1 percent in the first three months.
"Growth remained strong on the back of continued strength in housing activity, resilient infrastructure investment, and better external demand," said Robin Xing, chief China economist at Morgan Stanley in Hong Kong. "The strong growth and better external demand has provided room for a faster pace of countercyclical monetary policy tightening."