More favourable China’s economic prospects after abandoning zero-Covid policy – Rabobank


On the 7th of December China surprised friend and foe with an abrupt zero-covid U-turn. This year’s forecast has considerable up- and downside risks. Still, economists at Rabobank believe that from a medium-term perspective, China’s economic prospects have become more favourable after abandoning zero-Covid policy.

A pivotal pivot?

“While from a long-term perspective China’s decision to abandon its zero-covid policy is to be heralded, the short-term effects will likely turn out to be grim. The absence of (reliable and recent) data regarding new cases, hospitalization, deaths and many other relevant time series that could shed a light on the current situation, greatly complicates any attempt to make a solid impact analyses.”

“We expect a relatively mild recession that already started in the last quarter of last year and should end after the first quarter of this year. We further expect that most of the recovery hinges on a recovery in aggregate consumption and more specifically private consumption. All in all this should see the Chinese economy grow by 4.2% this year, but the uncertainty surrounding the impact of covid and the real estate sector ensure that it will likely be both an exciting and challenging year!”

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD holds higher ground near 0.6600 after strong China's Caixin Services PMI

AUD/USD holds higher ground near 0.6600 after strong China's Caixin Services PMI

AUD/USD holds higher ground near the 0.6600 mark early Tuesday. Strong China's Caixin Services PMI data for October underpins the Aussie amid a modest US Dollar uptick and a tepid risk tone. Traders remain reluctant ahead of the RBA policy decision and the US presidential election. 

AUD/USD News
USD/JPY rises toward 152.50, despite strong Japan's PMI, cautious mood

USD/JPY rises toward 152.50, despite strong Japan's PMI, cautious mood

USD/JPY has picked up fresh bids to test 152.50 in Asian trading on Tuesday, tracking the renewed US Dollar strength. The pair shrugs off strong Japanese PMI data and a cautious market mood. Traders remain wary as Americans head to polls this Tuesday. 

USD/JPY News
Gold price hangs near one-week low; downside seems cushioned ahead of the US election

Gold price hangs near one-week low; downside seems cushioned ahead of the US election

Gold price remains close to a one-week low set on Monday, though the downside seems limited amid safe-haven demand stemming from the US election uncertainty and talks of an Iranian retaliatory strike on Israel. 

Gold News
RBA widely expected to keep interest rate unchanged amid persisting price pressures

RBA widely expected to keep interest rate unchanged amid persisting price pressures

Australia’s benchmark interest rate is set to stay unchanged at 4.35% in November. The focus remains on Reserve Bank of Australia Governor Michele Bullock’s comments and updated economic forecasts. The Australian Dollar could wilt if RBA Governor Bullock ramps up bets for a December rate cut.

Read more
US presidential election outcome: What could it mean for the US Dollar?

US presidential election outcome: What could it mean for the US Dollar? Premium

The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures