China's fourth quarter GDP grows 6.5% year-on-year, beats expectations as recovery gains momentum

People cross a street during morning rush hour in front of the skyline of the central business district (CBD) in Beijing, China December 15, 2020. REUTERS/Thomas Peter

BEIJING (Reuters) - China’s economic recovery beat analyst expectations in the fourth quarter, expanding 6.5% from a year earlier, data from the National Bureau of Statistics showed on Monday.

The gross domestic product (GDP) growth was faster than the 6.1% forecast by economists in a Reuters poll, and followed 4.9% growth in the third quarter.

GDP grew 2.3% in 2020, the data showed, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

The world’s second-largest economy staged a strong comeback last year from the coronavirus-triggered paralysis, fuelled by a surprisingly resilient export sector, but consumption - a key driver of growth - has been lagging expectations amid fears of a resurgence of COVID-19 cases.

The slew of bright economic data has reduced the need for more monetary easing this year, leading the central bank to scale back some policy support, sources told Reuters, but there would be no abrupt shift in policy direction, according to top policymakers.

On a quarter-on-quarter basis, GDP rose 2.6% in October-December, the bureau said, compared with expectations for a 3.2% rise and a revised 3.0 gain in the previous quarter.

Reporting by Gabriel Crossley and Kevin Yao; Editing by Shri Navaratnam