Fitch Ratings has issued a “significant upgrade” to its China growth forecast for 2023, with the ratings agency now expecting the economy to expand by 5.2% this year – revised upwards from its previous forecast of 4.1% issued in December and from 5.0% in February.

The upgrade, which follows China’s decision to dump its COVID-zero policy in early January, is linked to a series of “high-frequency mobility indicators, PMI (Purchasing Managers’ Index) surveys and anecdotal reports” during the first two months of the year which suggests a rapid rebound is underway in activity and spending, Fitch said in a Monday note.

The faster than anticipated recovery is being led by consumer spending, particularly on “contact-intensive” activities, such as travel, accommodation, entertainment and restaurants, which were directly affected by pandemic restrictions.