Certainly! Let’s delve into the economic outlook for China in 2024. Here are some key considerations based on expert analyses:
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GDP Growth:
- China’s 2023 GDP reached 5.2%, in line with forecasts and consensus, significantly higher than the 3% growth in 2022 during the pandemic.
- However, considering the base effect, the two-year average GDP for 2022-23 dipped to 4.1%, deviating from the pre-pandemic track of “higher-than-6%” growth.
- Recent economic recovery is supported by factors such as consumption (service sector rebound), industrial production (focus on high-end manufacturing and green transformation), infrastructure investment (extra RMB 1 trillion government bond issuance), and resilient exports.
- Risks in 2024 include the real estate market, local government debt, deflation, declining foreign direct investment (FDI) and portfolio inflows, and geopolitical tensions. However, systemic financial risks are currently deemed low due to prudent monetary policy and regulatory measures.
- China-US relations remain uncertain, influenced by the newly elected Taiwan president and the US presidential election.
- Monetary and fiscal policies will remain expansionary in 2024 to support recovery, with the government likely announcing a GDP growth target of around 5%1.
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Other Forecasts:
- The Economist Intelligence Unit (EIU) predicts conservative growth for China in 2024 at 4.7%, considering the high base effect from strong post-recovery household consumption in 20232.
- Major international investment banks, including Goldman Sachs and Morgan Stanley, expect China’s real GDP to grow at a slower pace in 2024 (average prediction of 4.6%) compared to 20233.
- J.P. Morgan Private Bank Asia emphasizes headwinds but highlights segments of resilience in the Chinese economy. The housing market remains a key barometer of confidence, and policy support will be crucial to prevent deflationary pressures4.
In summary, China’s economic trajectory in 2024 faces challenges but also opportunities for recovery and stability.
