Greetings to all our readers! Today we have some interesting news from China about the country’s economic forecast for the year 2024. According to major international investment banks, China’s economy is expected to grow at a slower pace this year compared to 2023.
The average prediction among five firms, including Goldman Sachs and Morgan Stanley, pointed to a 4.6% increase in real GDP this year, down from 5.2% expected for 2023. Premier Li Qiang recently stated that the Chinese economy grew by around 5.2% in 2023. China is set to reveal this year’s target at an annual parliamentary meeting in early March.
JPMorgan had the highest forecast at 4.9%, while Morgan Stanley had the lowest at 4.2%. According to JPMorgan’s Chief China Economist and Head of Greater China Economic Research Haibin Zhu, an important task in 2024 is to manage the downside risk in the economy, particularly from the housing market correction and its spillover risks. Despite the challenges, analysts expect the deflation pressure to fade this year, with the turnaround in global commodity prices and domestic pork prices.
China’s economy had slowed down during the pandemic and more recently faced a slump in the real estate market. This led to a slower rebound from the pandemic as expected by many banks. Nevertheless, Beijing made the rare decision to increase the official fiscal deficit in October, and analysts predict that government macro policy will ease notably to prevent real GDP growth from decelerating too much from 2023 to 2024.
The International Monetary Fund also expects China’s growth to slow in 2024 to 4.6% amid continuing weakness in the property market and subdued external demand. It remains uncertain to what extent China is willing to stimulate its economy in response to these challenges.
Despite the slower outlook, analysts still see growth potential for China, particularly in further movement of workers from rural to urban areas, as well as investment in manufacturing, services, and renewable energy. Even at 3% to 4%, China’s growth remains faster than that of developed economies such as the United States.
In conclusion, China’s economic outlook for 2024 seems to be characterized by slower growth compared to the previous year, with challenges from the housing market correction and subdued external demand. However, there is still potential for growth in various sectors, and China’s economy is expected to remain faster in comparison to developed economies. We look forward to seeing how the Chinese government manages the downside risks and stimulates economic growth. Stay tuned for more updates!
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