Led by China’s robust reopening, the global economy surprised to the upside in the first quarter, says Fitch Ratings.
In a new report, the rating agency said that global growth had a better than expected start to the year, as China’s economy grew by 2.2% quarter over quarter, compared with its forecast of 1.4%.
China’s outperformance was driven by “a strong rebound in both exports and consumption,” Fitch said. “The lifting of Covid-19 restrictions has resulted in a rapid recovery in the service sector and property sales have stabilized.”
At the same time, growth in some of Europe’s larger countries, including Germany, France, Spain and Italy, also beat expectations. These upside surprises kept Euro area growth in line with expectations.
In the U.S., growth slowed sharply from the previous quarter, Fitch said, dropping from 0.6% in the previous quarter to 0.3%, which was below its 0.4% forecast.
“In terms of the composition of U.S. growth, strong consumption and a pick-up in exports were offset by a contraction in investment, the fourth consecutive quarterly decline, and falling inventories,” it said.