China’s economy grows by 5.4% in fourth quarter

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China’s economy grew more than expected in the last three months of 2024, official data showed on Friday, as it awaits the likely imposition of fresh tariffs by US President-elect Donald Trump, who takes office next week.

The world’s second-largest economy, which is struggling with demographic challenges, also notched a surprise increase in the birth rate last year, reversing a trend of declines that intensified from 2017. But the overall population continued to decline for a third year.

In the fourth quarter, China’s gross domestic product expanded by 5.4%, according to the National Bureau of Statistics. That’s considerably stronger than the 5.0% forecast by a group of economists polled by Reuters and represents an acceleration from the 4.6% pace posted in the third quarter.

As for the full year, growth came in at 5.0%, a shade higher than the 4.9% predicted by the Reuters poll.

“Amid a relentless barrage of economic pessimism, China’s economy defied expectations with a robust 5% growth last year, nailing the government’s ambitious target,” Stephen Innes, managing partner at SPI Asset Management, said in a research note. “This surge was fueled by a vigorous export boom and aggressive stimulus measures that counterbalanced the sluggish domestic demand.”

Momentum picked up in the last few months of 2024, after the Chinese leadership finally decided to go ahead with a much-needed stimulus package, mostly focused on monetary measures, in the last week of September.

“In retrospect, the policy pivot last September was meant to defend the GDP target (of around 5%),” Larry Hu, chief China economist at Macquarie Group, wrote in a research note on Wednesday.

Since then, policymakers have made a series of other moves – including a 10 trillion yuan ($1.4 trillion) debt package to help local governments, interest rate cuts and the expansion of a “cash-for-clunkers” scheme for household goods such as rice cookers – to boost growth.

The measures are part of a broader plan to spur growth in the world’s second-largest economy, where a severe property crisis has eroded consumer wealth and hurt household spending.

China’s struggling consumer sector has been a particular pain point for the economy with analysts and policy advisers calling for urgent measures to get households spending again.

This is a developing story and will be updated.