Barclays, the financial services company, cut its forecast for China’s GDP growth by 2023 to 4.5% from 4.9% due to a faster-than-anticipated deterioration in the housing market, bank analysts said in a note on Tuesday.
Data for China’s economic activity in July, including retail sales, industrial production and investment, fell short of expectations, fueling concerns of a deeper and more lasting slowdown in growth.
Most economists see downside risks to Chinese growth after the July data release, adding to a series of weak indicators from last week: falling exports and negative consumer prices.
“Our 2023 GDP growth forecast is already at the lower end of analyst forecasts, but we think the weaker-than-expected growth momentum in leading economic indicators suggests our forecast for a 4. 9% this year is increasingly difficult to achieve”Barclays said.
The macroeconomic data for July confirm two weaknesses in the growth recovery. The real estate sector remains a major drag on the economic recovery and the recovery in consumption has stalled against a backdrop of rising unemployment, Barclays said.
interest cut
The Chinese central bank unexpectedly cut a number of key interest rates on Tuesday ahead of the release of activity data for July.
Nomura and Citi were bearish on the world’s second-largest economy without major fiscal stimulus.
“We believe that the chinese economy faces an imminent downward spiral where the worst is yet to come and this morning’s rate cut will be of limited help.” Nomura said.
“Only the timely adoption of real measures can allow Beijing to meet the growth target of around 5%”Citi claimed.
(With information from Reuters)
Source: Gestion
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