Data from China on Tuesday showed that first-quarter gross domestic product (GDP) grew an impressive 4.5% year-on-year, beating market expectations of 4%. Affected by this, analysts at JPMorgan and Citigroup both raised their forecasts for China's economy for the full year of 2023.

JPMorgan raised its forecast for China's economic growth in 2023 to 6.4 percent from 6 percent previously. "The strong first-quarter GDP data suggests that the economic recovery is gaining momentum," Haibin Zhu, JPMorgan's chief China economist, said in a note on Tuesday. A combination of factors contributed to the strong rebound in economic activity in the first quarter, including a notable rebound in travel-related consumption and services. "  "The stronger-than-expected first-quarter GDP data raised our expectations for full-year GDP growth," he said.

Citi raised its forecast for China's 2023 economic growth to 6.1% from 5.7% previously, saying the Chinese economy is "on track to recovery, driven by consumption and services." Citi added that the stronger-than-expected first-quarter GDP data pointed to further growth ahead.

In addition to JP Morgan and Citigroup, UBS also raised China's economic growth forecast for 2023 to 5.7% from the previous 5.4%. UBS said: "Given the first quarter of 2023, the economic recovery is stronger than expected, driven by a strong rebound in consumption and housing."

Morgan Stanley also forecasts China's full-year growth of 5.7 percent, saying there are "upside risks" to that forecast. BNP Paribas also said its forecast for China's economy to grow by 5.6% for the full year "now looks to be trending higher" after the release of the first-quarter GDP data.