Foreign financial institutions raise China's 2023 GDP growth forecasts

China’s Central Economic Work Conference, which concluded on December 16, decided the country’s economic priorities for next year.

UBS Securities said the signals to stabilise the economy reiterated at the conference echoed messages delivered at a meeting of the Political Bureau of the Communist Party of China central committee in early December, an official Chinese media outlet reported.

Backed by robust infrastructure investment, resilient growth in manufacturing and the recovery of consumption, China's GDP growth will reach about 5 per cent next year, exceeding UBS' previous prediction of 4.5 per cent, the company estimates.

Morgan Stanley, which anticipates a ‘V-shaped’ recovery in China next year, also raised its forecast for the country's GDP growth rate in 2023 to 5.4 per cent, up from its previous projection of 5 per cent. A sharper rebound in business activity, expected to materialize late in the second quarter of next year, and more movement of people starting in early March, are major reasons for the company's upgraded forecast.

China's economic activity will return to the pre-pandemic level from the second quarter of 2023, and the upward momentum will continue until the end of the year, Morgan Stanley experts added.

Goldman Sachs raised its 2023 China GDP growth rate estimate from 4.5 per cent to 5.2 per cent. China will restart its growth given the outlook of a stronger A-share market, a mild rise in interest rates, increased demand for commodities, especially energy, as well as the renminbi's expected appreciation against the US dollar, said Shan Hui, the company’s chief China economist.

ALCHEMPro News Desk (DS)