Economists Lower China’s 2024 GDP Forecast Amid Economic Challenges
In Hong Kong, economists have revised their predictions for China’s GDP in 2024 due to ongoing economic struggles. The average GDP forecast by 28 experts has decreased to 4.8% from 4.9% in July. This change follows China’s recent interest rate cuts aimed at supporting the declining property market. Of the 25 economists surveyed earlier, 16 have lowered their forecasts, while 9 maintained their predictions. The GDP growth for July-September is estimated at 4.6%, down from 4.7% in April-June and 4.9% last year.
Ken Chen from KGI Financial Holding reduced his forecast to 4.9% from 5.3%, citing issues in industrial output, investment, and property sales. He noted that the economic growth trend remains downward due to the real estate cycle and external demand pressures. Despite government stimulus efforts, achieving the 5% GDP target seems challenging.
Economists identified the top three issues for China’s economy as the sluggish housing market, weak consumer confidence, and insufficient policy. Hui Shan from Goldman Sachs lowered her GDP forecast to 4.7%, questioning the effectiveness of previous property market policies. Tetsuji Sano from Sumitomo Mitsui DS Asset Management highlighted concerns about the aging population and declining consumer demand.
Real estate, accounting for 70% of household assets, impacts consumer confidence as home prices fall. China’s reliance on manufacturing and exports faces challenges, with industrial production growth slowing to 4.5% in August. Trade protectionism is rising, with the US, EU, and Canada imposing tariffs on Chinese electric vehicles, and Indonesia reimposing tariffs on Chinese textile imports.
Doubts Revealed
Economists -: Economists are people who study how money and resources are used in a country. They help predict how the economy will perform in the future.
China’s 2024 GDP Forecast -: GDP stands for Gross Domestic Product, which is the total value of all goods and services produced in a country. A forecast is a prediction about what will happen in the future. So, China’s 2024 GDP forecast is a prediction about how much China’s economy will grow in 2024.
Economic Challenges -: Economic challenges are problems that make it hard for a country’s economy to grow. These can include things like high unemployment, inflation, or issues in important industries like real estate.
Property Market -: The property market refers to buying and selling buildings and land. When the property market has problems, it can affect how much people feel their homes are worth, which can make them spend less money.
Consumer Confidence -: Consumer confidence is how people feel about the economy and their own financial situation. If people are confident, they are more likely to spend money, which helps the economy grow.
Real Estate -: Real estate is property consisting of land or buildings. It is a big part of many people’s wealth, so changes in real estate prices can affect how rich people feel.
Manufacturing and Export Sectors -: Manufacturing is making goods in factories, and export means selling goods to other countries. These sectors are important for a country’s economy because they create jobs and bring in money from other countries.
Industrial Production Growth -: Industrial production growth is how much more factories are making compared to before. If growth slows, it means factories are not making as much as they used to, which can be a sign of economic trouble.
Trade Protectionism -: Trade protectionism is when a country tries to protect its own businesses by making it harder for foreign goods to be sold there. This can include things like tariffs, which are extra taxes on goods from other countries.