GUANGZHOU - South China's bustling Guangdong province on Wednesday announced a better-than-expected annual economic growth rate of 7.3 percent in the first quarter of the year.

Driven by solid growth in the service sector, the economic powerhouse outperformed the national economy, which grew by 6.7 percent in the first quarter.

The main economic indicators in Guangdong fared better in March than in February and the economic recovery could be clearly felt, the Guangdong provincial bureau of statistics said in a statement.

The service sector grew 8.5 percent year on year in the Jan-March period, contributing almost 60 percent of the GDP growth.

According to the bureau, that showed Guangdong's success in developing new industries and business models to cushion the blow from economic uncertainties at home and abroad.

But Guangdong's economy still faces downside risk with weak industrial output, investment and retail sales, the bureau warned.