Meishan, China – January 15: Textile workers work at the workshop of Sichuan Renshou Jinhui Textile Co., Ltd. in Meishan, Sichuan, China, on January 15, 2024. (Photo provided by Pan Jianyong/VCG, Getty Images)
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BEIJING—A leading international investment bank expects China’s economic growth rate to be slower in 2024 than in 2023, according to annual forecasts released in recent months.
The average forecast from five firms, including Goldman Sachs and Morgan Stanley, was for real GDP to grow 4.6% this year, lower than the 5.2% forecast for 2023.
China is scheduled to release its 2023 GDP statistics on Wednesday, and had previously announced an official target for growth of around 5% for the year. Speaking at the World Economic Forum in Davos on Tuesday, Premier Li Qiang said China’s economy grew by about 5.2% last year.
The Chinese government is scheduled to reveal this year’s goals at its annual parliamentary meeting in early March.
China GDP forecast
| hard | 2024 | 2023 |
| goldman sachs | 4.8 | 5.3 |
| UBS | 4.4 | 5.2 |
| city | 4.6 | 5.3 |
| JP Morgan | 4.9 | 5.2 |
| morgan stanley | 4.2 | 5.1 |
| average | 4.6 | 5.2 |
Of the five banks surveyed by CNBC, JPMorgan had the highest forecast at 4.9%, and Morgan Stanley had the lowest at 4.2%.
“A key challenge in 2024 will be to manage economic downside risks, particularly from housing market adjustments and their spillover risks,” said Zhu Haibin, JPMorgan’s Chief China Economist and Head of Greater China Economic Research, and his team. stated in an earlier report. Month.
“Deflationary pressures are likely to ease in 2024 due to an improvement in global commodity prices and domestic pork prices, but low inflation will continue along with a lack of domestic demand,” the analysts said, adding that new technology and other noted that although the sector is growing rapidly, growth is not slowing down. That’s enough to offset housing and other growth constraints.
The world’s second-largest economy has slowed from the double-digit growth seen in previous decades, weighed down by coronavirus restrictions during the pandemic and a recent slump in the real estate market.
Despite strong growth in sectors such as tourism and electric vehicles, China’s economy did not recover from the pandemic as quickly as many banks had initially expected last year.
In November, Goldman Sachs analysts said in their 2024 outlook that “China’s economy did not perform as expected in 2023.”
They highlighted the Chinese government’s unprecedented decision to widen the public budget deficit in October.
“Overall, we expect macro policy to ease significantly.” [in 2024]In particular by the central government to support the economy and prevent real GDP growth from slowing too much in 2023-2024. ”
In November, the International Monetary Fund also cited China’s policy announcements as the reason for its decision to raise its growth forecast for 2023 to 5.4% from 5%.
However, the IMF said it still expects China’s growth rate to slow to 4.6% in 2024 “due to continued weakness in the real estate market and weak external demand.”
The extent to which China intends to stimulate its economy remains unclear.
Premier Li said in Davos on Tuesday that China “did not resort to large-scale stimulus. We did not seek short-term growth while accumulating long-term risks.”
In the long term, analysts generally expect China’s economy to slow further from its high level.
UBS expects annual GDP growth to slow to around 3.5% from 2025 onwards, due in part to the housing recession, and expects this to limit the rollout of China’s economic stimulus measures.
Analysts at UBS say China still has the potential for growth, particularly through the movement of more workers from rural areas to cities and investment in manufacturing, services and renewable energy.
Even at 3% to 4%, China’s growth pace is still faster than that of developed countries.
In October, the IMF predicted that U.S. real GDP growth would slow to 1.5% in 2024 from 2.1% in 2023. The IMF is scheduled to release an update on its global forecasts on January 30th.