China's economy rebounded substantially in the second quarter with stronger-than-expected GDP growth of 3.2 percent from a year earlier, and economists said that such recovery momentum is likely to be sustained in the coming quarters as policies are expected to remain supportive and flexible.

The country has become the world's first major economy that has shown robust recovery from the damage caused by the COVID-19 pandemic as the economy returned to growth from a sharp contraction of 6.8 percent in the first quarter.

Key economic indicators have shown continuous improvement. The country's industrial production is recovering quickly and grew by 4.4 percent year-on-year in the second quarter, contrasting with an 8.4 percent decline in the first quarter, according to data released by the National Bureau of Statistics on Thursday.

The service sector expanded by 1.9 percent in the second quarter, reversing the decline of 5.2 percent in the first three months. Both investment and consumption are rebounding as the decline in fixed-asset investment narrowed to 3.1 percent in the first half of the year while the contraction of retail sales narrowed to 3.9 percent in the second quarter from the steep decline of 19 percent in the previous quarter, according to the NBS.

"Generally speaking, the economy overcame the adverse impact of the COVID-19 pandemic gradually in the first half of the year and demonstrated a momentum of restorative growth with greater resilience and vitality," Liu Aihua, an NBS spokeswoman, said at a news conference in Beijing.

Economists said that China's strong economic rebound was helped by factors including the country's effective measures to bring the pandemic under control, strong policy support for business resumption and investment, and better-than-expected export recovery as a result of the country's fast production resumption.

"While the global pandemic situation continues to deteriorate, China's economy has managed to recover quickly with GDP growth rebounding to above 2 percent, which is a remarkable achievement," said Lu Ting, chief China economist at Nomura Securities.

Lu said that China's fast production resumption has helped the country's export recovery and stabilized employment. In addition, timely and effective policies to spur infrastructure investment have also helped to drive up domestic demand.

Economists at US bank Goldman Sachs said in a research note that China's economic performance in the second quarter was well above market expectations thanks to much less drag on the economy from the virus and the government's strong and supportive policy stance.

More policies to boost consumption and domestic demand are expected as the country's recovery has shown some uneven signs with supply recovering faster than demand while investment appears to be rebounding more strongly than consumption, economists said.