Following the Chinese economy’s strong first-quarter results, global analysts have raised their full-year projections, according to CNBC on Wednesday.
JPMorgan reportedly increased its 2023 growth prediction to 6.4% from 6% before, citing the current quarterly report as evidence of future development.
Citi increased its projection from 5.7% to 6.1%, adding that the Chinese economy is “well on track on its post-Covid recovery led by consumption and services.”
Meanwhile, UBS raised its year-end projection from 5.4% to 5.7%, citing a “stronger-than-expected recovery in Q1 2023, driven by a robust rebound in both consumption and property.”
The upgrades come on the heels of a report from China’s National Bureau of Statistics on Tuesday, which revealed that the economy had recovered quicker than predicted, exceeding growth projections for the first quarter of 2023. According to the research, the world’s second largest economy rose at a 4.5% annual pace due to loosened Covid-19 limits and recovering consumer expenditure.
“The strong 1Q GDP report points to a strong post-reopening recovery,” said Haibin Zhu, chief China economist at JPMorgan. He emphasised that a variety of variables, including a significant comeback in travel-related consumption and services, had led to the strong improvement in first-quarter activity.
“The stronger-than-expected 1Q GDP reading lifts our full-year GDP growth forecast,” Zhu said, adding that China’s recovery “will most likely continue in the near term.”
Citi experts also thought that the stronger-than-expected first-quarter growth indicates that the economy will continue to expand.
“Given that meaningful recovery may have only begun after Chinese New Year, the underlying momentum may be stronger than the headline number suggests,” they wrote in a note obtained by CNBC.
“The release of pent-up demand during Covid and the holiday helped,” analysts continued. “However, we remain cautious on its outlook in the absence of significant stimulus and the discounts intensifying.”
Global analysts have already expressed concern that China’s economic recovery may take longer than anticipated due to supply chain delays caused by pandemic-related restrictions.
