Market Watch reported on the 26th that S&P Global, an international credit rating agency, has lowered its forecast for China’s gross domestic product (GDP) growth in 2023 from 5.5% previously.
According to the media, S&P Global said in a research note on the 25th that major economic indicators in May of China’s faltering economic recovery after COVID-19, lowering its economic growth forecast for this year by 0.3 percentage points.
S&P Global pointed out that “China’s economic recovery was expected to continue in the first place, but the pace has become unbalanced, with investment and industrial sectors slowing down.”
S&P Global is the first major credit rating agency to lower its growth outlook in China.
China’s economy was sluggish in May, with real estate investment further sluggish and industrial production and retail sales falling below expectations.
As a result, expectations are rising that additional economic stimulus measures are needed to support the Chinese government’s recovery after the reopening.
In March, the Chinese government set its 2024 growth target at around 5% through a report on government work at the National People’s Congress (National People’s Congress). The growth rate in the first quarter of January-March was 4.5%.
Earlier, major U.S. and European banks also lowered their outlook for China’s economic growth to between 5.2 and 5.7%.
Goldman Sachs changed China’s growth rate from 6.0 percent to 5.4 percent. UBS cut China’s GDP forecast by 0.5% points from the previous 5.7% increase to 5.2% growth.
Standard Chartered lowered China’s growth rate by 0.4 percentage points this year from 5.8 percent previously announced.
In addition, Standard Chartered lowered its expected growth rate in the second quarter of April-June from 7.0% to 5.8%, which is expected to grow at a high rate due to the base effect caused by lockdown in the same period last year.
BofA also lowered its GDP forecast to 5.7% from the previous 6.3% increase, while JP Morgan dropped from 5.9% growth to 5.5%.
A related source involved in China’s economic policy decision observed that Xi Jinping’s leadership will focus on stimulating sluggish consumption and private-sector demand by proposing additional support measures to cope with the economic slowdown.
