CNGDPYYQ1/2026 5%
source: National Bureau of Statistics of China
- China’s economy expanded 5.0% yoy in Q1 2026, accelerating from 4.5% in Q4 and beating market forecasts of 4.8%.
It marked the fastest annual growth in three quarters, as Beijing braces for potential fallout from the Iran war.
So far, the economy has managed to absorb the shock with limited disruption, supported by ample oil reserves, a diversified energy mix, and state controls that help contain price volatility.
However, the underlying momentum appeared uneven in March, as industrial output rose more than expected, but retail sales growth missed estimates, and the jobless rate hit a 13-month high.
On the trade front, exports slowed sharply in the month while imports surged.
Meantime, fixed-asset investment in the first three months of the year continued to grow, albeit at a slower pace.
Despite the stronger start, economists expect China’s growth momentum to soften over the rest of the year, weighed down by mounting external headwinds, particularly the prolonged Middle East crisis.
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