reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=CNGDPQP GDP survey data
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=CNINFQP inflation polls
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=CNLPRQP Lending Survey Data
China’s Q4 GDP grew 5.3% y/y, against 4.9% in Q3
GDP growth seen at 5.2% in 2023, 4.6% in 2024
Inflation seen at 1.0% in 2024, 1.6% in 2025
C.bank saw a benchmark lending rate cut by 10 bps in Q1
By Kevin Yao
BEIJING, January 15 (Reuters) – China’s economic growth is likely to slow to 4.6% in 2024, and cool further to 4.5% in 2025, a Reuters poll showed, turning up the heat on policymakers to dish out more stimulus amid deflationary pressures and a severe property decline.
Gross domestic product (GDP) is likely to grow 5.2% in 2023 – meeting the government’s annual growth target, helped in part by the low base effect of the previous year, which was marked by a COVID-19 lockdown, according to the median forecasts of 58 economists polled by Reuters.
But the world’s second-largest economy has struggled to mount a strong and sustainable post-COVID pandemic rebound, weighed down by the protracted property crisis, weak consumer and business confidence, rising local government debts and weak global growth.
Recent data suggested that the economy begins 2024 on a shaky footing, with persistent deflationary pressures and a slight pick-up in exports unlikely to spark a quick turnaround in weak domestic activity. December bank lending was also weak.
“The government’s aim is to reduce the oversupply that has grown in the sector in recent years and to match supply to real demand. We therefore expect the slowdown to continue through 2024 and beyond.”
GDP in the fourth quarter of 2023 is likely to have grown 5.3% from a year earlier, accelerating from the 4.9% pace of the third quarter, the survey showed.
But quarterly, the economy is expected to grow 1.0% in the fourth quarter, compared to an increase of 1.3% in July-September, the survey showed.
The government is due to release 2023 and Q4 GDP data, along with December activity data, on Wednesday. (0200 GMT).
“The fragile recovery could remain on track in December although it could be a soft patch,” analysts at Citi said in a note. “Policy delivery could be key to watch in the next few months.”
Beijing has set a growth target of around 5% in 2023 and political insiders expect it to maintain such a target this year.
MORE STIMULUS ON THE CARDS
The People’s Bank of China (PBOC) has promised to strengthen policy support for the economy this year and promote a rebound in prices.
But the PBOC faces a a dilemma because more credit flows to productive forces than to consumption, which could add to deflationary pressures and reduce the effectiveness of its monetary policy tools.
On Monday, the PBOC left the medium term policy rate unchanged, defying market expectations for a cut, as pressure on the yuan currency continued to limit the extent of monetary easing.
Analysts polled by Reuters had expected the central bank to cut the one-year lending rate (LPR) — the benchmark lending rate — by 10 basis points (bps) in the first quarter.
The PBOC may also cut banks’ reserve requirement ratios (RRR) in March-April if economic indicators continue to weaken, Minsheng Bank chief economist Wen Bin said in a note.
The government, which in October unveiled 1 trillion yuan in sovereign bonds to fund investment projects, is likely to push for more fiscal spending to spur growth, analysts said.
Consumer inflation is likely to increase to 1.0% in 2024 from 0.2% in 2023, and increase to 1.6% in 2025, the survey showed.
Chinese GDP data to show weak recovery
(Reporting by Milounee Purohit and Anant Chandak; Reporting by Kevin Yao; Editing by Kim Coghill)
((kevin.yao@thomsonreuters.com; +8610 5669 2128;))
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