Goldman Sachs Group Inc. and Morgan Stanley raised their outlook for China’s economic growth this year as factory activity and exports accelerate more than expected.
China’s economy likely expanded at a 7.5% annualised pace in the first quarter from the prior three months, Goldman economists led by Hui Shan said in a note Wednesday — higher than their 5.6% prior estimate. The bank now sees 2024 growth forecast at 5%, in-line with Chinese policymakers’ target, versus 4.8% previously.
Morgan Stanley also lifted its 2024 growth forecast, to 4.8% from 4.2% previously, citing better-than-expected export growth from resilient US demand and robust export volume. Beijing’s increased focus on supply-chain upgrade is also expected to lead to stronger capital expenditure in the manufacturing sector, according to a report dated Wednesday.
The world’s second-largest economy has struggled to regain momentum as the property sector and consumer spending remain weak, though data so far this year have shown green shoots in factory activity and trade.
Data next week is set to show the economy expanded at a 5% year-on-year pace in the first quarter from 5.2% at the end of last year, according to forecasts. Deflationary pressures remain, with consumer prices barely increasing from a year earlier last month, according to data released Thursday.
The upward revisions come after a key gauge of factory activity — the Caixin manufacturing PMI — indicated a fifth straight month of expansion in March, with official government data also showing a rebound. Exports have also increased amid rising global demand for technology goods.
“Recent China macro data have been solid,” Goldman’s economists wrote in the note, adding that the manufacturing data “suggests the Chinese economy found a local bottom in late 2023 and is on the way up.”
Also Read: Asian Development Bank raises India's GDP growth forecast to 7% for FY25
China’s economy likely expanded at a 7.5% annualised pace in the first quarter from the prior three months, Goldman economists led by Hui Shan said in a note Wednesday — higher than their 5.6% prior estimate. The bank now sees 2024 growth forecast at 5%, in-line with Chinese policymakers’ target, versus 4.8% previously.
Morgan Stanley also lifted its 2024 growth forecast, to 4.8% from 4.2% previously, citing better-than-expected export growth from resilient US demand and robust export volume. Beijing’s increased focus on supply-chain upgrade is also expected to lead to stronger capital expenditure in the manufacturing sector, according to a report dated Wednesday.
The world’s second-largest economy has struggled to regain momentum as the property sector and consumer spending remain weak, though data so far this year have shown green shoots in factory activity and trade.
Data next week is set to show the economy expanded at a 5% year-on-year pace in the first quarter from 5.2% at the end of last year, according to forecasts. Deflationary pressures remain, with consumer prices barely increasing from a year earlier last month, according to data released Thursday.
The upward revisions come after a key gauge of factory activity — the Caixin manufacturing PMI — indicated a fifth straight month of expansion in March, with official government data also showing a rebound. Exports have also increased amid rising global demand for technology goods.
“Recent China macro data have been solid,” Goldman’s economists wrote in the note, adding that the manufacturing data “suggests the Chinese economy found a local bottom in late 2023 and is on the way up.”
Also Read: Asian Development Bank raises India's GDP growth forecast to 7% for FY25
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