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While China’s economic indicators for June displayed some signs of stabilization, mainly driven by policy support, the country’s GDP growth in the second quarter came much weaker than expected, Citi Research said in its note.
That make the “around 5%” growth target for 2023 at risk, the bank said.
The Chinese authorities may introduce quick and easy stimulus measures, and the PBOC may cut the policy rate by 20 basis points and RRR by 25 basis points in the third quarter of the year as more pivotal steps are needed to keep growth on track, according to the note
Factoring in realistic policy support, Citi lowered the forecast of China’s 2023 GDP growth to 5% year over year.