Standard Chartered new growth forecasts for Chin have been severely cut, citing the weak data from China for july published on Monday.
Analysts at the banks are looking for China’s Q3, Q4 and 2022 annual GDP growth to
- 3.2% y/y
- 3.3%, respectively
Prior forecasts were:
Also cite the political complications surrounding COVID outbreaks:
We expect the path to China’s economic recovery to be a slog as local governments are likely be cautious about relaxing business restrictions ahead of the 20th Party Congress due to fears of COVID resurgence.
Data views ahead:
- High frequency data indicates industrial activity is likely to remain weak in August due to deteriorating consumer sentiment and new COVID outbreaks.
- The drag of COVID prevention measures on services and retail sectors intensified
- Fixed asset investment growth slowed … led by moderating manufacturing investment growth and larger declines in real estate investment
- Infrastructure investment growth picked up … thanks to strong government support
And, their People’s Bank of China forecast:
Given the surprise interest rate cut by the People’s Bank of China (PBoC) today, we now expect another 10bps cut to the medium-term lending facility (MLF) rate before end-October, to support the economic recovery amid continued headwinds from a weakening housing market, deteriorating consumer sentiment and new COVID outbreaks
PBOC Governor Yi Gang