- Economists downgrade GDP growth forecast for this year to 3.3%
- Most economists only see China reopening borders next year
According to Bloomberg’s article published on October 28, 2022, China’s economic growth outlook is darkening, with economists downgrading their forecasts through 2024 as many bet Beijing will take a slow approach to dropping its Covid Zero policy.
Growth is now expected to be below 5% for each year through 2024, the latest Bloomberg survey of economists shows. The median forecast for this year was lowered to 3.3% from 3.4% in the previous survey, while next year’s was cut to 4.9% from 5.1%. In 2024, the economy is seen expanding 4.8%, down from the 5% projected earlier.
China’s zero-tolerance approach to combating Covid infections has been a major drag on the world’s second-largest economy, with frequent lockdowns and regular testing making consumers wary of traveling and spending, while businesses contend with ongoing disruptions. On top of that, the worst housing market slump on record is rippling through sectors like construction and banking.
China’s zero-tolerance approach to combating Covid infections has been a major drag on the world’s second-largest economy, with frequent lockdowns and regular testing making consumers wary of traveling and spending, while businesses contend with ongoing disruptions. On top of that, the worst housing market slump on record is rippling through sectors like construction and banking.
Some 60% of the economists surveyed saw China’s delayed reopening as the biggest threat to economic growth, with 30% citing the slowdown in global growth.
On inflation, economists see a weaker outcomes for consumer and producer prices in the fourth quarter compared with earlier predictions. Consumer inflation will likely average 2.7% in the final quarter, while producer inflation will be zero, the latest forecasts show.
Economists raised their estimates for export growth slightly for the fourth quarter to 3.7% from 3.1%, while cutting their predictions for imports sharply to 0.5% from 2.9%. Retail sales are now expected to reach 4% from 4.8% in the previous survey.
“Consumption remains a weak link amid the zero-Covid stance, with its growth outlook darkening,” said Bernard Aw, an economist for Asia Pacific at Coface SA, who now predicts 3.2% for this year.
