The Chinese economy grew more than expected

China's economy grew by 4,5% in the first quarter. - above expectations, which amounted to 4 percent. This is an important signal at a time of declining growth in other parts of the world. Growth in China is currently the most serious protection against an occurrence global recession in the world. The VIX volatility index has fallen to its lowest level since early 2022.

The economy of the Middle Kingdom is accelerating

After three years of lockdown due to the pandemic, China is recovering for good. In the first three months of the year, it increased by 4,5 percent. This result beat market expectations, which amounted to 4 percent. The main source of growth is a revival in local demand, with retail sales up 10,6% in March, the best result in more than two years. This is a great signal for the world, because China is the only major economy in the world that will grow faster in 2023 than in the previous year. Growth in China also affects other economies and protects the world from the risk of a global recession. China is the second largest economy in the world, producing 19% of global GDP.

The revival of Chinese demand contributed to a further increase in European results luxury goods sector, od LVMH after Burberry. It should also boost demand for raw materials, of which China is the world's largest buyer.

Data from China fit into the generally positive picture of the first quarter in the global economy, which was a big surprise in the face of not very positive expectations. In addition to higher economic growth in China, strong consumer spending in the US and falling gas prices in Europe were also significant factors. This bodes well for US companies' first-quarter results, whose reporting season has just begun. However, it should be remembered that the level of uncertainty in the market remains high. And this despite the fact that VIX volatility index, which discounts predictions of market volatility over the next 30 days, fell to its lowest level since January 2022.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.