China's gross domestic product (GDP) expanded 4.5 percent year on year in the first quarter of 2023 as economic activities gain traction, data from the National Bureau of Statistics (NBS) showed on Tuesday.

"We are seeing an accelerating recovery in all sectors with stronger momentum, including the improving domestic demand," said Pang Ming, chief economist and director of Research at JLL Greater China.

The growth rate was higher than analysts' expectation of 4 percent in a Reuters poll.

The market expectation has significantly improved since the start of the year, said Fu Linghui, spokesperson of the NBS. He added that the economy's growth rate in the second quarter is expected to accelerate significantly compared to the first quarter because of the low comparison base in the same period last year.

Going forward, Pang cautioned that policy support and targeted easing are still needed to secure sustainable growth amid external uncertainties.

China's macroeconomic policies should keep domestic demand expansion as a priority in light of generally weak external demand, said Cheng Shi, chief economist at ICBC International.

In the first quarter, the total retail sales of consumer goods rose 5.8 percent year on year. Notably in March, consumer spending surged 10.6 percent year on year, 7.1 percentage points higher than that in the first two months.

There is divergence in the recovery pace among different consumption types, said Wen Bin, chief analyst at China Minsheng Bank. Offline and get-together spending continued to pick up, while the durable goods consumption was lacking, reflecting people's income and willingness to shop require a further boost, he added.

A recent central bank survey of depositors showed that "tourism" tops the list of the expected increase in expenditure in the second quarter.

The investment in fixed assets grew by 5.1 percent year on year in the first quarter while the total added value of large industrial enterprises grew by 3.0 percent in the same period.

China has set a GDP growth target of around 5 percent for this year. Local governments around the country are gearing up support for the economy including optimizing the business environment, stabilizing employment and promoting consumption.