J.P.Morgan Mark GDP Calls Higher

J.P.Morgan write “the loss of growth momentum since 2Q has put China in a shaky position to achieve this year’s growth target (of around 5%), which back in March was perceived as a conservative target. Two positive developments seem to have put the economy back on track.”

• “First, August activity was stronger-than-expected, suggesting the economic slowdown since April has likely bottomed and the economy started to turn around.”
• “In addition, incremental policy easing actions have been announced since mid-August, the impact of which will likely feed through to the real economy in the coming months.”
• “In response, we have revised up the full-year growth forecast to 5.0% for 2023 (previously: 4.8%) and 4.4% for 2024 (previously: 4.2%).”
• “Further policy measures could be announced, such as product-specific consumption support and further relaxation of administrative controls in the housing market.”
• “We would also watch out for a policy scheme (debt swap or debt restructuring) to deal with local government hidden debt and likely policy measures to support the surviving private developers.”
• “On the cautious side, weak private investment and housing market continue to be the major drags.”
• This comes after Citi marked their ’23 GDP forecast up to 5%.