Research China – Lift to GDP forecast after leaders draw line in the sand

Danske Research Team Danske Bank A/S

Summary

Following the big stimulus and clear growth message from Chinese leaders, we revise up our China growth forecast in 2025 from 4.8% to 5.2%. For 2024 we keep our 4.8% forecast.

The stimulus is the strongest coordinated push to lift the economy since the global financial crisis in 2008. We expect China to follow up with fiscal stimulus measures on the other side of the National Day holiday.

The key to turning the Chinese slump is to put a stop to the housing crisis, which we see as the epicentre of current challenges. We now look for a gradual improvement in housing over the next year but not a fast rebound.

China is set to change from a disinflationary force to a more neutral force. Since we look for the recovery to be gradual we do not expect China to become an inflationary force within the next 6-12 months.

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Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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