VIEW: ANZ: China’s GDP Growth Profile Downgraded

ANZ note that “April’s economic activities were very weak. Despite this, we are maintaining our +5.0% GDP forecast for 2022 on expectations that the stronger stimulus measures and pent-up demand will offset the loss of economic activity in the past two months.”

• “However, we are pessimistic about China’s medium-term outlook. The authorities are expected to unwind their supportive measures next year. This coincides with an uncertain global outlook with US growth likely to retreat. Now we are cutting our GDP forecast to +4.2% from +5.1% for 2023.”
• “The impact of Shanghai’s lockdown is far-reaching. Economic and technological linkage with the rest of the world is at risk. With total factor productivity yet to catch up, China’s growth will likely stay at the low end of the 4.0-5.0% range in the next few years.”