ANZ: GDP Downgrade On Emerging Downside Risks

ANZ note that “weaker than expected Q2 GDP has prompted us to revise down our 2022 annual GDP forecast to 4.0% y/y from 5.0% y/y. This indicates an average 5.3% y/y in the second half of this year. We keep our 2023 GDP forecast unchanged at 4.2%. More importantly, we see new downside risks. Domestic activity has been suppressed by frequent COVID testing and restrictions. Property demand could also falter as home buyers have begun to stop mortgage payments. The youth jobless rate hit a record 19.3% in June. The unemployment rate will guide the policy decisions of the State Council, which will continue support for small and medium enterprises and rural entities.”