China Forecast Update

Despite signs of recovery, weak demand remains a risk.

Economic recovery in May was led by industrial production and fixed investment. Growth in services, retail sales, and housing sales all remained in negative territory – albeit at an improved pace compared with April.

Eased COVID-19 restrictions and stimulus measures should speed up the recovery in June. But the pace of growth is likely to be modest in 2H because of a weakening global economy and the downcycle of China’s property market. As a result, we have revised down our 2022 and 2023 GDP forecasts for China.

See Economy Watch: China View (June 2022).

Note: RHS: right hand axis of the Chart.

Sources: National Bureau of Statistics China (NBS), Census and Economic Information Center China, and The Conference Board.