On Tuesday, September 28, 2021, workers work in a swimwear factory in Jinjiang, Fujian Province, southeast China.
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BEIJING-Prior to the release of China’s quarterly growth data on Monday, most major investment banks lowered their economic forecasts for this year and warned that sudden power outages and a downturn in the real estate market could drag down economic growth.
updatednews24 tracked 13 major banks’ forecasts for China’s full-year GDP, and 10 of them have lowered their forecasts since August. After the recent cuts, the average forecast for this year is an increase of 8.2%. This is 0.3 percentage points lower than the previous median forecast.
Among the companies tracked by updatednews24, Japanese investment bank Nomura Securities has the lowest full-year forecast for China at 7.7%. DBS Bank, the largest bank in Southeast Asia, has the highest percentage at 8.8%.
The following is the bank’s forecast for the whole year:
Banks that lowered China’s GDP forecast
- ANZ Bank: Decreased from 8.8% to 8.3%
- Morgan Stanley: Decreased from 8.2% to 7.9%
- Bank of America: Decreased from 8.3% to 8%
- Citi: Decreased from 8.7% to 8.2%
- Deutsche Bank: Decreased from 8.9% to 8.4%
- Goldman Sachs: Decreased from 8.2% to 7.8%
- HSBC: Decreased from 8.5% to 8.3%
- Nomura: Decreased from 8.2% to 7.7%
- Standard Chartered Bank: Decreased from 8.8% to 8.2%
- JPMorgan: Decreased from 8.7% to 8.3%
Banks that haven’t changed China’s forecast
- Credit Suisse: 8.2%.
- DBS Bank: 8.8%.
- UBS: 8.2%.
China’s economic structure
The negative factors for growth this year have increased, from lower-than-expected consumer spending to destructive floods. Adding to the uncertainty are Beijing’s extensive regulatory crackdowns, including alleged monopolistic actions against debt-laden real estate developers and Internet technology giants.
Strong export growth is still a bright spot. China’s economic expansion is still expected to exceed the IMF’s 5.9% global growth forecast.
Analysts said that China is taking this opportunity to make painful but necessary adjustments to the economy this year. The official GDP target of over 6% this year is far below the target bet by investment banks.
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