UBS raised forecast of China’s 2023 economic growth to 5.4%
UBS raised forecast of China’s 2023 economic growth to 5.4%

UBS raised forecast of China’s 2023 economic growth to 5.4%





UBS raised its forecast for China’s economic growth this year to 5.4%, higher than its previous estimate of 4.9%, according to a research note released on Monday.

The bank also raised its forecast of China’s GDP growth rate in 2024 from 4.8% to 5.2%.

China’s economic recovery has been stronger than expected, with stable market supply chains and a recovering real estate market, and as consumer confidence gradually improves, the momentum of the economic recovery may last into 2024, the bank said.

UBS said China’s CPI is expected to grow by 2.5% this year, lower than its previous forecast of 3.0% growth.

“China’s economic re-opening is proceeding better than we had expected earlier – the feared “second-wave” of Covid did not materialize and there was little sign of supply disruptions,” the bank said.

Chinese Premier Li Keqiang said in his government report on Sunday that China set its economic growth target this year at “around 5%”.

UBS believes that the government is likely to introduce more specific measures to support economic growth engines such as infrastructure investment and consumption. “”

While the PBOC is unlikely to cut policy interest rate again, but its monetary policy is expected to maintain “loose”, and the central bank is likely to rely more on sub-loans and other instruments to maintain ample liquidity and also lower banks’ reserve requirement ratio again, the bank said.

China stocks, which are in downward correction recently, may hit the bottom soon and the MSCI China Index is expected to rise by about 14% this year, well above expected 2% gain fro the MSCI Asia Index, the bank said.

UBS expects the yuan’s exchange rate against the US dollar to reach 6.6 by the end of June and reach 6.5 per dollar in the following quarters.