China stabilising; 5.2% real 2023 GDP growth forecast stays: EIU

Fixed-asset investment in between January and August slowed marginally to 3.2 per cent from 3.4 per cent between January and July.

The readings were in line with projections made earlier by the Economist Intelligence Unit (EIU), which retained its forecast of 5.2 per cent real gross domestic product (GDP) growth for this year for the country.

Building signs of structural stress in the economy have dampened EIU’s longer-term outlook, and it now expects headline growth to trend consistently below 5 per cent over the remainder of the 2020s.

Another month-on-month rise in consumer prices—at 0.3 per cent, accelerating marginally from 0.2 per cent in July—underpins EIU’s belief that consumer confidence is recovering. EIT expects this underlying strength to persist through the rest of this year.

The most pessimistic element of China’s economic outlook continues to be the property sector, EIU notes, expecting the market to remain under strain in the near term.

The lukewarm economic outlook, alongside recent credit data, suggests more generally that private investment will continue to struggle in the near term, it notes.

The sustained downturn in investment—including in both the property and private sectors—underpins EIU’s revised forecast for 2024. It now expects headline real GDP growth of 4.8 per cent for next year from 5.1 per cent earlier.

ALCHEMPro News Desk (DS)