International Organizations Raise China's Growth Forecasts Successively... "5.2% Possible"

ADB·IMF, Growth Forecast Raised from 4.9% to 5.2%

International organizations are consecutively revising upward their forecasts for China's economic growth rate. This is interpreted as reflecting China's moderate economic recovery since the third quarter of this year and the government's stimulus stance.

On the 13th, the Asian Development Bank (ADB) announced that it is raising its forecast for China's economic growth rate this year from 4.9% to 5.2%. The ADB adjusted its growth forecast for developing Asian countries from 4.7% to 4.9% in September, simultaneously raising China's growth forecast. However, regarding next year's forecast, it maintained 4.8% for developing countries and 4.5% for China.

[Image source=AP Yonhap News]

Earlier, the Organisation for Economic Co-operation and Development (OECD) also released its economic outlook report at the end of November, raising China's growth forecast from 4.9% to 5.2%. Earlier this month, the International Monetary Fund (IMF) raised China's growth rates for this year and next year by 0.4 percentage points to 5.4% and 4.6%, respectively. Gopinath, IMF's First Deputy Managing Director, commented that this was due to "stronger-than-expected growth in China's economy in the third quarter and a series of recent policy measures taken by China," and predicted that "reflecting a strong recovery after COVID-19, China will achieve this year's target (around 5.0%)."

Additionally, several international investment banks such as JPMorgan Chase, Goldman Sachs, Citi, UBS, and Deutsche Bank have recently raised their growth forecasts for China to the range of 5.0% to 5.5%. The China Securities Journal explained, "All entities see that China's economy is continuously recovering and improving, endogenous momentum is increasing, and positive factors for economic operation are accumulating."

Wang Qing, Chief Macro Analyst at Dongfang Jincheng, explained, "The recent upward revisions of China's growth forecasts by international organizations positively acknowledge the effects of growth stabilization policies," adding, "This also aligns with various macro data trends since the third quarter."

The Bank of China Institute released the 'China Economic and Financial Outlook Report' yesterday, forecasting that China's GDP growth rate in the fourth quarter will reach 5.6%. Combining with previous growth rates, the annual growth rate is expected to be around 5.3%, achieving the government's target. Zheng Houcheng, Chief Macroeconomist at Yingda Securities, also predicted that China's growth target for next year will not be lower than this year’s.

Meanwhile, on November 11-12 in Beijing, the Chinese Communist Party and government held the Central Economic Work Conference, attended by President Xi Jinping and other leaders, to decide the macro policy direction for next year. At this meeting, the Party and government set "economic stability" and "reasonable quantitative growth" as the top priorities for next year's policy direction and expressed their determination to respond to the real estate downturn. However, immediately after the related content was disclosed, the Hong Kong stock market on the 13th showed a sluggish trend, falling 1.1% in the morning session alone. Bloomberg News diagnosed that "due to the absence of large-scale stimulus signals, the stock market declined due to investor disappointment."