J.P.Morgan, ANZ raise 2023 China GDP forecast
FILE PHOTO: People stand at a shopping mall near the CCTV headquarters and China Zun skyscraper, in Beijing’s central business district (CBD), China September 7, 2023. REUTERS/Tingshu Wang/File Photo
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BEIJING (Reuters) – J.P.Morgan and ANZ on Friday raised their 2023 economic growth forecast for China, after August economic numbers offered some signs of stabilization in the world’s second-largest economy.
Both raised their GDP forecast by 20 basis points each to 5% and 5.1% respectively, with JPM saying notable recovery in retail sales and rise in service activity were the biggest surprises.
China’s factory output and retail sales grew at a faster pace in August, but tumbling investment in the crisis-hit property sector threatens to undercut a flurry of support steps that are showing signs of stabilizing parts of its wobbly economy.
Haibin Zhu, economist at JPM, said that government growth-stabilization policies announced since mid-August have been incremental but extensive, and will likely seep into the real economy in the coming months.
Zhu said additional fiscal and housing policy relaxation like subsidy for product-specific consumption support, relaxation of home buying restrictions, sales restrictions and price controls in tier-1 and 2 cities may follow in the near term.
“On the cautious side, while demand-side easing in the housing market is a welcome step, real estate investment will likely remain sluggish,” JPM said.
Goldman Sachs kept its third-quarter GDP growth forecast unchanged at 4.9% but said China’s economy is still in a tug of war between persistent growth headwinds and increasing policy support.
