China's Q1 GDP Grows 5% Amid Deflation Pressures

China's National Bureau of Statistics reported that real GDP rose 5.0% year‑on‑year in the January‑March quarter, marking the first quarterly expansion in five consecutive quarters. The rebound was driven by improved domestic demand while external demand remained solid, despite a broader slowdown outlook for 2025. The government reiterated its target of 4.5‑5.0% annual growth and signaled continued policy support, including subsidies for appliances, equipment upgrades, and infrastructure investment. Trade tensions with the United States have eased since the October summit, lowering the risk of new export pressures. However, deflationary pressure persists, with the GDP deflator having been negative for twelve straight quarters, indicating that price pressures have not yet eased. Analysts note that lingering imbalances in supply and demand, a weak property market, and local‑government debt pose ongoing risks to a self‑sustaining recovery.