The year-on-year growth rate of GDP in the first quarter was higher than market expectations
In the first quarter, China's GDP was 270178 billion yuan, a year-on-year increase of 4.8% at constant prices, higher than market expectations and a month on month increase of 1.3% over the fourth quarter of 2021. By industry, the added value of the primary industry was 1095.4 billion yuan, a year-on-year increase of 6.0%; The added value of the secondary industry was 106187 billion yuan, an increase of 5.8%; The added value of the tertiary industry was 153037 billion yuan, an increase of 4.0%. Overall, under the multiple risk challenges of the impact of the epidemic, international geopolitical conflicts and a new round of interest rate hikes triggered by global high inflation, GDP grew by 4.8% year-on-year in the first quarter of this year, which means that China's economy has a generally stable start, continues to recover its development trend and operates within a reasonable range. With the annual target growth rate of 5.5%, the implementation of the steady growth policy will be strengthened in the future, and there is still room for structural easing of fiscal and monetary policy.
It is expected that China's CPI will remain stable and the year-on-year increase of PPI will slow down
On the whole, under the control of policies such as ensuring the supply and price of China's bulk commodities, the inflation level is controllable as a whole. It is expected that China's CPI will continue to remain stable in the future. The recently released opinions of the CPC Central Committee and the State Council on accelerating the construction of a national unified market points out that it is necessary to break local protection and market segmentation, open up the key blocking points restricting the economic cycle, and promote the smooth flow of commodity factor resources in a wider range, This will effectively consolidate China's huge market resource advantages, promote the release of commodity production capacity, and ensure the stability of China's energy and other bulk raw material prices. On the other hand, high global inflation will continue to pose an imported inflation risk to China. The rise of international oil prices caused by the conflict between Russia and Ukraine has entered a phased decline. Coupled with the vigorous implementation of the policy of ensuring the supply and price stability of coal and other resources, we expect the year-on-year increase of PPI to continue to slow down.
Investment in infrastructure and manufacturing was strong, while real estate investment was sluggish
In the first quarter, the national fixed asset investment (excluding farmers) increased by 9.3% year-on-year, and the investment in infrastructure, manufacturing and other fields maintained a good growth, reflecting that the overall investment played a vital role in stabilizing growth. Among them, infrastructure investment in March increased by 8.5% year-on-year, with a year-on-year growth rate of 0.4 percentage points higher than that from January to February, mainly because the 2022 government work report proposed to "expand effective investment and carry out infrastructure construction moderately in advance", and all localities actively promoted the commencement of major projects, driving the rapid growth of investment. Manufacturing investment increased by 15.6% year-on-year. Although it slowed by 5.3 percentage points compared with the previous two months, it is still higher than the growth rate of 13.5% in the whole year of last year. The innovation driven effect is remarkable, and the investment in high-tech industries plays a leading role. Among them, the investment in high-tech manufacturing and high-tech industries increased by 32.7% and 27.0% respectively, which has become an important support to drive the transformation and upgrading of the real economy. On the other hand, real estate investment showed a relatively weak state. In the first quarter, the national real estate development investment was 2776.5 billion yuan, a year-on-year increase of 0.7%. We expect that with the gradual adjustment of real estate policies in many cities, it will help release housing demand and promote the stabilization of the real estate market. Real estate investment will become the key to the overall investment growth. The role of infrastructure in stabilizing growth will be more prominent and will play an important role in stabilizing the economy in the first half of the year.
