BEIJING, (Reuters) – China’s unexpectedly high factory production rate in the first half of this year was accompanied by record retail sales. This despite the fact that the country faces a rise in COVID-19, a downturn in property markets, and heightened global uncertainty.

According to official data, industrial output rose 7.5% from January-February last year, an increase of 4.3% in December. This compares to a 3.9% increase in a Reuters survey.

The increase in demand due to the Lunar New Year holidays saw retail sales grow 6.7% from January to February. This was despite a 1.7% decrease in December. It was also higher than the 3.0% expected increase.

Fixed assets investment increased 12.2% year over the previous 5.0% rise predicted by the Reuters poll, and the 4.9% growth forecast for 2021. This was the highest figure since July 2017.

China’s second-largest economy performed unexpectedly in 2012, after losing momentum due to a liquidity crunch in China’s property market. Consumer confidence was also affected by strict antivirus measures.

Premier Li Keqiang stated on Friday that he was confident in achieving the 5.5% target for economic growth this year, despite difficulties such as the conflict in Ukraine. Li pledged to increase policy support for the country in the coming year.

China’s economy is usually affected in January and February by the Lunar New Year holiday that lasted for a week. It fell in February 2022. Due to COVID controls, many factory workers did not leave their jobs and the factory floors were humming during this holiday.

Factory inflation in the United States slowed to 0.9% during February. However, consumer inflation rose 0.9%. These figures are indicative of a cautious market that has been already affected by the strict anti-coronavirus policies.

According to surveys of purchasing managers, factory activity increased slightly in October as more orders were placed, which points out some economic resilience.

In an effort to spur economic growth, the central banks lowered its mortgage lending benchmark rate in January, and reduced its reserve ratio in December. There are more easing measures expected.

According to last week’s finance ministry, China’s central banking will pay some of its profits this year to the government to help fund an increase in fiscal expenditure.