China's economy maintained strong growth momentum in April, with gauges of consumption and services gathering pace, improving the outlook for steady growth of the world's second-largest economy this year, officials and analysts said.

The foundation for the steady growth, however, is still not solid as internal drivers are not strong enough and demand is still insufficient. Greater support should be given to bolstering demand, spurring investment and anchoring expectations, they added.

Retail sales of consumer goods — a major gauge of consumption — rose 18.4 percent year-on-year to 3.49 trillion yuan ($501 billion) in April, and expanded by 7.8 percentage points from the level in March, data from the National Bureau of Statistics showed on Tuesday.

The recovery of consumption is still in its early stages. As the economy improves, with greater employment and an improved consumption environment, the driving force of consumption will be further strengthened, said NBS spokesman Fu Linghui.

Zhou Maohua, an analyst at China Everbright Bank, said that despite rapid growth in consumption of high-end goods — like jewelry — and services such as catering, expenditure on durable goods such as furniture and home appliances remained subdued in April.

In the face of sluggish external demand, China needs to further boost domestic consumption, with a focus on durable goods, Zhou said, adding that preferential policies such as those for home appliance upgrades and related subsidies should be rolled out.

The index of services production rose by 13.5 percent year-on-year in April, according to the bureau. The rise was 4.3 percentage points higher than the previous month.

Xu Hongcai, deputy director of the China Association of Policy Science's Economic Policy Committee, said that pent-up demand in the services sector, especially contact-based services, has been unleashed gradually after the country optimized its COVID-19 response measures.

The value-added industrial output, a gauge of activity in the manufacturing, mining and utilities sectors, rose 5.6 percent year-on-year in April, and expanded by 1.7 percentage points from the level in March, the data showed. Fixed-asset investment in the first four months climbed 4.7 percent year-on-year, 0.4 percentage points lower than that of the first three months.

Zhou said that the two figures fell short of market expectations due to sluggish demand. Policy steps to further tap consumption potential and expand effective investment should be better leveraged to fuel economic recovery.

Fu, the NBS spokesman, said that the Chinese economy continued to rebound in April through more enabling factors. However, given the complex and severe international landscape and insufficient domestic demand, the internal driving forces for economic growth remain modest.

China's consumer price index, a main gauge of inflation, edged up 0.1 percent year-on-year in April, according to the bureau.

The People's Bank of China, the country's central bank, said in its first-quarter monetary policy report on Monday that it will keep abreast of any marginal changes in price levels and anchor social expectations, while ensuring prudent monetary policy to provide an appropriate amount of steady support.