China’s GDP growth forecasts slashed as coronavirus, a property sector slump and heatwaves erode economic recovery
- Global investment banks Standard Chartered, Goldman Sachs and Nomura have all cut their 2022 economic growth forecasts for China
- New coronavirus outbreaks and downward pressure on the real estate market are chief reasons China’s economic recovery is losing steam
Growth forecasts for China this year have been slashed by global investment banks as the economy struggles to shake off a number of issues, from new coronavirus outbreaks to downward pressure on the housing sector.
Gross domestic product (GDP) growth estimates for the world’s second largest economy range between 2.8 and 3.3 per cent, according to updates published in mid-August.
“The second quarter has been extremely low due to Covid restrictions,” said Alicia Garcia Herrero, chief Asia-Pacific economist with the French investment bank Natixis.
“Quarter three has not started very well, with some reduction in domestic mobility from a peak in June, but also [due to] a worsening environment for housing sales, which are growing highly negatively, and so is fixed asset investment in real estate.”
Standard Chartered have forecast China’s GDP growth at 3.3 per cent, while Goldman Sachs estimated 3 per cent and Nomura forecast just 2.8 per cent, all lower than earlier predictions this year. Natixis has also cut its forecast to 3.5 per cent growth.