China's GDP growth in the first quarter remained stable at 6.4 percent year-on-year, exceeding slowing forecasts By Reuters

By Kevin Yao and Lusha Zhang

BEIJING (Reuters) – China's economy grew by a staggering 6.4 percent in the first quarter compared to the previous year, challenging the slowdown, as industrial output rose sharply.

Optimistic figures, which also showed faster growth in retail sales and investment, should further increase optimism about the slowdown in the Chinese economy that could begin to stabilize, soothing investors' concern about global demand.

But analysts believe that it is too early to call a lasting recovery and that additional political support is probably needed.

Analysts polled by Reuters expected a slight slowdown in growth, to 6.3% between January and March, the slowest pace in at least 27 years.

The Chinese economy is experiencing more positive factors at the moment, although it still faces many external uncertainties, said Wednesday the National Bureau of Statistics in a statement.

Industrial production jumped 8.5% in March from a year earlier, its fastest pace in over four and a half years. The reading easily surpassed analysts' estimates of 5.9% and those of 5.3% observed during the first two months of the year.

Retail sales rose 8.7% in March, outperforming analysts' estimates of 8.4% growth and the previous 8.2%.

Capital investment increased 6.3% from January to March compared to the same period last year, which is in line with the 6.3% estimate.

Real estate investments rose 11.8% in the first three months, up slightly from the 11.6% gain recorded from January to February.

Analysts polled by Reuters expect China's economic growth to slow to 6.2 percent, its lowest level in 30 years this year, as demand stagnates in the United States and the US. 39, foreign and Sino-US trade war continue to weigh on the activity despite the many measures of support for the policy.

The government is targeting economic growth of 6.0 to 6.5% in 2019.

On a quarterly basis, first-quarter GDP increased by 1.4%, as expected, but increased from 1.5% in October to December.