VIEW: Nomura Cuts China GDP Growth Estimates

Nomura note that "China's growth plunged in Q3 to 4.9% Y/Y and may drop to 3.0% in Q4 owing to both supply and demand shocks. Despite an alleviated energy shortage and fine-tuning of property curbs, we believe economic conditions are likely to further deteriorate as the pain threshold seems yet to be reached for Beijing to take real actions. Markets may still underestimate the upcoming pain likely ahead for both the economy and financial markets. We cut our Q122 and Q222 GDP growth forecasts to 2.9% Y/Y and 3.8%, respectively, from 3.4% and 4.4%. We expect Beijing to take bolder steps to support growth in mid-Q2. Growth may then quicken to 5.1% Y/Y in both Q322 and Q422. We forecast sequential growth at 0.2%, 2.1%, 1.4% and 1.3% from Q1 to Q4 next year. Accordingly, we cut our '22 GDP growth forecast to 4.3% from 4.8%. We expect Beijing to target growth for '22 at an achievable "around 5%.""