JPMorgan has clipped its forecast for China’s economic growth this year, pointing to the country’s troubled housing sector and new Covid outbreaks hitting its production centres.
JPM revised its full year 2022 gross domestic product (GDP) growth forecast to 3.0% from 3.2% on Friday, and revised its 2023 forecast to 4.6% from 5.1% previously.
The cut to the forecast takes JPM’s estimate further below the 5.5% growth target Beijing said it hopes to reach in 2022.
“Our baseline assumption expects a shift away from zero-Covid policy next spring,” JPMorgan’s analysts said.
“While this will help permanently remove the Covid-uncertainty faced by the economy, the transitional period could observe a spike in new infections, volatility in public sentiment and temporary drags on economic performance.”
- Reuters with additional editing by Sean O’Meara