China’s Q1 rebound, outlook dimmed
China is expected to report first‑quarter GDP growth of about 4.8% year‑on‑year, signalling a rebound at the start of 2026. Economists say that headline gain likely reflects past stabilisation efforts, but the Iran war is already weakening expectations for activity later in the year. (businesstimes.com.sg)
China’s economy is expected to show a stronger start to 2026, with first-quarter growth forecast at 4.8% from a year earlier before slowing later in the year. (usnews.com) A Reuters poll of 50 economists put first-quarter growth at 4.8%, up from 4.5% in October through December, with quarter-on-quarter growth seen at 1.3% after 1.2% in the prior quarter. China is due to publish the gross domestic product report and March activity data at 0200 GMT on April 16. (usnews.com) The same poll projected growth easing to 4.7% in the second quarter and 4.6% for full-year 2026, down from 5.0% in 2025. That would still sit within Beijing’s official 2026 target range of 4.5% to 5.0%. (usnews.com) (cnbc.com) The stronger first quarter looks tied to policies already in place rather than a fresh turn in demand. Beijing set its 2026 budget deficit at around 4% of gross domestic product and has leaned on bond issuance, trade-in subsidies and easier monetary policy to support growth. (usnews.com) (chinadaily.com.cn) (english.news.cn) Exports have been the clearest support. China’s goods trade rose 18.3% in January and February from a year earlier, and March exports were expected to remain strong even as economists warned that Middle East fighting could weaken global demand. (english.www.gov.cn) (usnews.com) The risk now is energy. Reuters reported that economists expect the Iran war to raise oil costs, squeeze factory margins and eventually hit exports if the conflict drags on and slows the world economy. (usnews.com) Morgan Stanley said higher oil prices would hit China through a trade shock and margin pressure, but argued China is better placed than many oil-importing peers because it has large reserves, a broader energy mix and tighter price controls. CNBC separately reported that the bank cut its 2026 China growth forecast to 4.7% under an assumption that oil averages $110 a barrel in the second quarter. (usnews.com) (cnbc.com) Domestic demand is still the weak spot. Goldman Sachs said low household consumption and labor-market weakness remain structural problems, even as the drag from the property slump is expected to lessen in 2026. (goldmansachs.com) Recent price data show the tension between weak spending and rising costs. China’s consumer prices rose 1.0% in March, while producer prices rose 0.5%, ending a 41-month factory-gate deflation streak. (news.cgtn.com) International forecasters were already looking for modest growth before the latest oil shock. The International Monetary Fund projected China’s 2026 growth at 4.5% in its January update, while the Asian Development Bank said this month that conflict in the Middle East would weigh on the wider region’s outlook. (imf.org) (adb.org) If the April 16 data match expectations, China will have opened 2026 with a rebound on paper and a weaker path underneath it. The next question is whether exports and state support can keep carrying growth as energy costs rise and consumption stays soft. (usnews.com)
