China Looks Poised to Regain Its Pre-Pandemic Growth Trajectory

China’s economy looks to be on pace to return to its pre-pandemic growth trend by the end of 2023. The National Bureau of Statistics published data on April 18 showing that gross domestic product expanded 4.5% in the first quarter, fueled in large part by a spree of revenge spending by shoppers, travelers, diners and moviegoers. Households allocated more of their income to consumption and less to savings, a sign that consumers had recovered their nerve following Beijing’s decision late last year to abandon Covid-19 controls, triggering a massive wave of infections.

Several investment banks and money managers promptly upgraded their 2023 growth forecasts to well above the government’s official target of about 5%. Patrick Zwiefel, chief economist at Pictet Asset Management, is among the most optimistic. He’s penciled in a 6.6% expansion for the full year, powered by an 11% jump in consumer spending.