(Yicai Global) March 15 -- After China’s key economic data beat market forecasts for January and February, the first quarter is likely to show a strong revival from the low base a year earlier when the coronavirus outbreak hit the economy, according to the National Bureau of Statistics.

The economy has continued to recover since the beginning of this year and there could be a substantial bump in gross domestic product, Liu Aihua, a spokesperson for the National Bureau of Statistics, said at a press conference today.

GDP fell 6.8 percent to CNY20.65 trillion (USD3.17 trillion) in the first three months of last year. It was the first quarterly contraction since China adopted GDP as an economic indicator in the early 1990s.

The economy had legs in the first two months of this year. In January and February, the total value-added of industrial enterprises above a designated size jumped 35.1 percent over the previous year and 16.9 percent from the same period in 2019, according to NBS data released today.

Total retail sales of consumer goods reached CNY6.97 trillion (USD1.07 trillion) in January and February, up 33.8 percent from a year ago and 6.4 percent from the first two months of 2019.

In a survey by Yicai Global, chief economists from 20 major Chinese financial institutions said the industrial added value of big industrial firms in the first two months of this year is expected to have gained 30.1 percent and consumer goods sales are likely to have jumped 31.1 percent from a year earlier.

Imbalances

But despite the recovery, there is an imbalance between different sectors, Liu said. For instance, consumption and service indicators in some sectors that involve contact among people have not returned to pre-coronavirus outbreak levels.

On the whole, the surge in gauges in January and February was a result of economic factors, policy factors, and the low base last year. Positive economic factors included improved external demand and local epidemic prevention measures to encourage people to reduce travel and stay put during the Spring Festival holiday, which boosted industrial production activities before and after the holiday, Liu said.

Liu also pointed out that from January to February this year, China’s fixed asset investment (excluding rural households) rose an average 1.7 percent compared with the past two years, while manufacturing investment fell an average of 3.4 percent.

That shows that although the coronavirus has been effectively controlled, it may take some time for manufacturing investment to recover, because that requires the recovery of business investment strength and investment confidence, Liu said, adding that the external environment is still complex.

Liu said consumer prices are expected to remain within a reasonable range. Pork prices, which play an important role in the consumer price index, are expected to continue to fall in the future, as supply continues to recover.

He also said the real estate market has the right conditions for sustained and healthy development.

Editor: Tom Litting