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'21 China GDP Forecasts Marked Lower In Wake Of July Data

CHINA

In light of the softer than expected economic activity data for July several sell-side names marked down their '21 GDP growth expectations for the Chinese economy.


BankNew '21 GDP Growth ForecastPrev. '21 GDP Growth ForecastGeneral Policy Comments
ANZ8.30%8.80%To ensure cross-cyclical adjustment of macro policies, China's policymakers will stablise growth in H221, in our view. Although they are unlikely to inject massive stimulus to boost headline growth, the central bank will maintain an easing bias. We expect another RRR cut and other monetary policy tools such as the targeted medium term lending facility (TMLF).
CBA8.40%8.60%Against easing growth momentum, we expect fiscal policy will be more supportive in H221. Local government special bond issuance will likely pick up meaningfully. We expect the People's Bank of China (PBoC) will cut the Required Reserve Ratio (RRR) by 50bp in Q421.
J.P.Morgan8.70%8.90%We maintain our policy view of two more RRR cuts (in October and January) and a 5bp PBoC policy rate cut in Q421, and that fiscal policy will turn growth-supportive.
Societe Generale8.00%8.50%More policy easing looks warranted, so we now expect a 10bp PBoC policy rate cut (to the reverse repo and MLF rates) on top of the 50bp RRR cut already pencilled in before year-end. But that would not be enough to stabilise growth quickly, certainly not until policymakers meaningfully ease back on deleveraging policy, and there are very few signs of this. Given the lack of desirable options, a consumption and/or green stimulus looks increasingly likely.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Energy BulletsCommodities
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Energy BulletsCommodities

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