“The recovery is still on track, and we estimate that gross domestic product growth will reach 6 per cent in January and February, and around 5 per cent in the first quarter,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

But while China is poised to post positive economic data in the first quarter, it remains too early to discuss whether Beijing would meet its full-year target, with the property market trend the biggest risk to the economy, Ding added.

“Beijing may not introduce large-scale stimulus, but rather policies targeting the weakest parts of its economy. We expect Beijing to continue to reduce borrowing costs for real estate developers and further relax house-purchasing restrictions in certain cities,” Ding said.

But Monday’s data release also showed China’s industrial output continued to improve in the first two months of the year, rising by 7 per cent from a year earlier due to strong exports.

“This largely reflects a higher base for comparison as consumer spending surged at the start of last year thanks to the reopening,” said Huang Zichun, China economist at Capital Economics, who added that a recovery in sales was still under way after accounting for base effects and seasonality.

Property investment in 2023 had dropped by 9.6 per cent, year on year. And despite an acceleration in property policy easing, new home sales plunged by 29 per cent in value, year on year, in the first two months, while new starts declined by 30 per cent.

“Despite the decline in home sales, which continued at the start of the year, the correction in property construction is still in its early stages,” Huang added. “We expect it to halve in the coming years, pulling down economic growth over the medium-term.”

China’s property crisis has worsened, according to Larry Hu, chief China economist at Macquarie Capital, largely as policy responses have been inadequate and reactive, with Beijing reluctant to step in as the lender or buyer of last resort.

But as China’s economy is likely to grow by 5 per cent in the first quarter, this may reduce the urgency for policy support during the upcoming Politburo meeting in late April, and policymakers may roll out more demand-side easing and push banks to lend based on the new Project Whitelist, Hu said.

China launched the project in January, which allows city governments to recommend residential projects suitable for financial support to banks, and to coordinate with financial institutions to meet the needs of the projects.

“In our view, these measures may ease, but not solve, the credit risks related to developers,” Hu added.

Elsewhere, China’s overall fixed-asset investment rose by 4.2 per cent in January and February, year on year, while private investment grew by 0.4 per cent.

The NBS said private investment had ended its run of steady declines, adding that it is expected to pick up gradually this year after Beijing issued 1 trillion yuan (US$139 billion) worth of treasury bonds in October.

China’s overall urban unemployment rate for January and February, meanwhile, stood at 5.3 per cent, compared with 5.1 per cent in December.

The NBS said the youth-unemployment data for February would be released later this week.

“The economic data is neither surprisingly good nor bad. It shows the ongoing trends that China’s manufacturing sector is recovering gradually with stable consumption, but the big problem in real estate is still worsening,” said Gary Ng, a senior economist with Natixis Corporate and Investment Banking.

“It is unlikely to see any breakthrough in improvement in the coming months until the challenges in property and the jobless rate ease.”

China’s economic figures for January and February are combined to smooth out the impact of the Lunar New Year holiday, which falls at different times during the two months in different years.

“Overall, in January-February, China’s economy continued to rebound with various macro-policies coming into effect,” NBS spokeswoman Liu Aihua said.

“Yet, we should also see increasing external complexity, severity and uncertainty, coupled with insufficient domestic demand, and there is still the necessity to strengthen the foundation for a sustained economic recovery.”