# China economy shows resilience as Q1 2026 GDP grows 5 percent, but April retail sales and industrial output miss forecasts amid Middle East conflict and energy price shocks.

*business · news · 2026-05-18 · News18*

## Key points

- China's Q1 2026 GDP grew 5 percent, reaching the upper end of Beijing's annual target.
- April 2026 retail sales in China rose just 0.2 percent, a steep drop from March.
- Industrial output growth for April reached 4.1 percent, below both March levels and economist forecasts.
- The closure of the Strait of Hormuz due to conflict drove crude oil prices to $111 per barrel.
- China's main economic metrics missed expectations amid ongoing Middle East conflict and energy shocks.

China economy shows resilience as Q1 2026 GDP grows 5 percent, but April retail sales and industrial output miss forecasts amid Middle East conflict and energy price shocks The Chinese economy has been battered by the global energy crisis, with major metrics, including industrial output, retail sales, and fixed-asset investment, missing expectations. According to the South China Morning post citing the data from the National Bureau of Statistics, retail sales growth fell substantially to 0.2 per cent in April, compared to 1.7 per cent in March. Meanwhile, China’s industrial output grew 4.1 per cent year-on-year in April, down from 5.7 per cent the previous month and below a 5.63 per cent projection by economists. The report attributed the Fu Linghui, a bureau spokesperson, saying that the Chinese economy had shown ‘strong resilience’ despite the prolonged Middle East conflict, volatile energy prices, and disruptions to global supply chains. China’s economy posted stronger-than-expected growth in the first quarter of 2026, with GDP expanding 5 per cent year-on-year despite the disruption caused by the US-Israel conflict involving Iran. The growth figure placed the economy at the upper end of Beijing’s annual target range of 4.5 per cent to 5 per cent, signalling resilience in the face of rising geopolitical tensions and global economic uncertainty. The West Asia crisis that prompted the closure of the Strait of Hormuz has impacted the crude oil and natural gas supply, shooting up prices to a record level of $111 per barrel. The geopolitical volatility remains as the war drags on. It’s been over 10-week since the Iran-US war began. If the war continues, which seems a high possibility as no resolution is in sight, with negotiations failing.

**Countries:** China, Iran, United States

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