China may not roll out large-scale stimulus policy in H2, Q2 GDP growth to reach 7% – research
MACRO VIEWS & ANALYSIS
China may not roll out large-scale stimulus policy in H2, Q2 GDP growth to reach 7% – research
MACRO VIEWS & ANALYSIS

China may not roll out large-scale stimulus policy in H2, Q2 GDP growth to reach 7% – research

 

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China’s economic growth is expected to reach 7% year over year in Q2 of the year and the growth in the second half is expected to be in the range of 5% – 5.5%, said Hu Yifan, UBS Global Wealth Management Regional CIO and Head of APAC Macroeconomics.

The supportive economic policy will continue, but the government will unlikely introduce large-scale stimulus, Hu said.

After China relaxed Covid curbs late last year, the market had expected it would take three months for the economy to start quick recovery, but the economy started to recover in February and the momentum picked up in March, leaving the performance in Q1 stronger than expected and fuelling expectations for a V-shaped recovery for the whole of 2023, said Hu.

However, weakening data in April and May disappointed the market and led to market concerns that the recovery momentum may not sustain, she said.

Consumption has become the biggest driving force for the recovery and the service sector has posted a strong rebound, and meanwhile, auto consumption has also become a major driving force after the government extended the tax exemption and cut policy for new energy vehicle purchases and traditional fuel vehicle companies cut prices.