Stronger measures to unlock consumption potential and boost infrastructure investment are on the horizon and will be key to sustaining an economic rebound for the rest of the year, officials and experts said on Friday.

China's retails sales, the barometer for domestic consumption, contracted by 19 percent on a yearly basis during the first quarter of the year, largely due to the COVID-19 outbreak, the National Bureau of Statistics reported on Friday.

Over the same period, fixed-asset investment declined by 16.1 percent year-on-year, but recovered from a nearly one-quarter plunge for the January-February period as work resumption accelerated last month, the bureau said.

The contraction in retails sales also narrowed and stood at 15.8 percent for March, versus a 20.5-percent drop in the first two months, according to the NBS.

"Expanding domestic demand is essential to maintain a steady trend of the Chinese economy," said Mao Shengyong, an NBS spokesperson. "We need to increase the intensity of policies from all aspects to release the consumption potential."

Despite the moderate drop in residents' disposable income during the first quarter, consumption still has solid potential for a heathy rebound, Mao said, citing that income growth will recover as economic order returns to normal.

The social insurance system has offered a stronger and wider cover in recent years, while people's pursuit of better living standards still remained strong, he said.

China's average individual disposable income declined by 3.9 percent during the first quarter, more resilient than the 6.8-percent contraction in GDP, according to the NBS.

The value of physical commodities sold on the internet rose by 5.9 percent year-on-year last month, bucking the overall drop in retail sales and indicating the intact trend of consumption upgrade, the bureau reported.

Lynda Zhou, portfolio manager at global investment management company Fidelity International, said China's economic growth will be more reliant on consumption and fixed-asset investment this year, as exports face mounting downside risks due to the weak external demand amid the COVID-19 pandemic.

Liu Chunsheng, an associate professor with the Beijing-based Central University of Finance and Economics, said more fiscal stimulus may be rolled out soon, as the monetary policy has paved the way by creating a more accommodative financing environment.

Consumption vouchers should and are expected to be distributed across the nation in a coordinated and city-by-city manner, which will have an instant effect on consumption, Liu said.

NBS official Mao said that the consumption vouchers released in East China's Zhejiang and Jiangsu provinces have "worked rather well".

Liu also called for a broad-based cut in the purchase tax for automobiles as well as cash subsidies to households to further revive consumption.

As consumption and private investment may take time to recover, analysts expect public-funded infrastructure investment to shore up economic growth in the second quarter of the year. Apart from technology upgrade, urbanization and the revamp of old urban dwellings are also among the key areas of this year's infrastructure investment, said Cheng Shi, chief economist of ICBC International.

Li Xiang contributed to this story.