Following the release of disappointing statistical data, several investment banks have revised their growth projections for the Chinese economy in 2024. Initial expectations of a 5% or higher increase in Chinese GDP have now been adjusted, with Goldman Sachs Group forecasting 4.9%, Barclays at 4.8%, and JPMorgan Chase & Co. at 4.7%, as reported by MarketWatch. Even analysts who have not yet adjusted their forecasts acknowledge the risks posed by the lackluster data.
China’s GDP growth decelerated to 4.7% year-on-year in April-June, marking the lowest rate since the first quarter of 2023, according to China’s National Bureau of Statistics. Data from June indicated a slowdown in both industrial production and retail sales within China.
Looking ahead to the second half of the year, GDP performance may further weaken, given the strong base for comparison. The persistent downturn in the real estate sector continues to present a significant challenge.
To sustain growth rates and offset sluggish domestic demand, China will require increased political backing, caution analysts. Citi economists highlight that external demand, which previously bolstered exports and mitigated weak domestic demand, is now constrained by growing protectionist sentiments among trading partners. The recent second-quarter data underscored that “external demand cannot serve as a substitute for domestic demand,” they emphasized.
Despite these adjustments, macroeconomic forecasts are subject to inaccuracies, as highlighted by calculations from The Insider. Forecasts for Russian and global GDP by entities such as the World Bank, IMF, Bank of Russia, and the Ministry of Economic Development have demonstrated similar levels of precision.
Article from theins.ru