**New figures issued by China show its economy grew at a rate of just under 12% in the first quarter of this year - a higher figure than expected.**Inflation was 2.2%, which was below market expectations. A huge fiscal stimulus package has increased consumer confidence and boosted spending.
“We have got off to a good start this year,” a Chinese spokesman said.
However some experts worry the fiscal stimulus package could be stoking up future problems for the economy.
Cheap and plentiful loans are helping to push up housing prices and raising fears of a bubble, BBC business reporter Linda Duffin says.
That is why mortgage rates have been raised and a new sales tax on homes has been introduced, she adds.
But the low inflation rate in the first quarter eases pressure on Beijing’s policymakers to hike interest rates and cool the boom.
And if the government is successful at keeping growth at a manageable rate, China is likely to overtake Japan as the world’s second biggest economy this year, our reporter says.
Li Xiaochao, spokesman for China’s National Bureau of Statistics, told reporters in Beijing that the “momentum of national economic recovery” had further expanded and there was “a good foundation for reaching the targets set for the whole year”.This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.