China’s economy grew above expectations in Q1

China’s economy grew faster than expected in the first quarter, offering some relief to officials as they try to shore up growth in the face of protracted weakness in the property sector and mounting local government debt. 

The world’s second-largest economy expanded 5.3% in the first quarter this year, beating consensus for 4.6% growth and slightly better compared to the previous quarter’s 5.2% expansion i 

On the other hand, several economic indicators released recently, including property investment, retail sales and industrial output, warn that domestic demand remains weak and weighing on the overall picture. 

While the quarterly Gross Domestic Product data showed the economy was off to a solid start this year, data on exports, consumer inflation producer prices and bank lending for March showed that momentum could falter again, spurring calls for more economic stimulus. 

Disappointing factory output and retail sales, released alongside the GDP report, also underlined the persistent weakness in domestic demand. 

Industrial output in March grew 4.5% from a year earlier, below the 6.0% forecast and a gain of 7.0% for the January-February period, while retail sales rose 3.1% year-on-year in March, missing the 4.6% growth forecast and slowing from a 5.5% gain previous month and crisis in the property sector being a major drag on China’s economy. 

China’s new home prices fell at their fastest pace in more than eight years last month. Property investment fell 9.5% year-on-year in the first quarter, deepening its slump after a 9.0% drop in January-February. Sales tumbled 23.7%, compared with a 20.5% fall in the first two months of the year. 

Ongoing tensions with the United States over trade, technology and geopolitical situation, mark additional challenge for China.