Type to search

JP Morgan Upgrades China Growth Forecast Despite Covid Surge

But another banking giant ING is less optimistic about China’s recovery prospects and fears the loosening of Covid-19 curbs won’t be enough to revive the economy

JPMorgan is among a clutch of foreign banks that have won approval to expand their operations in China recently.
JPMorgan is among a clutch of foreign banks that have won approval to expand their operations in China recently. File photo: Reuters.


JP Morgan has upgraded its growth forecast for China next year, banking on an economic revival after it gets to grip with a surge in Covid cases following a relaxation of its ‘zero-Covid’ laws.

The US bank now expects China’s gross domestic product (GDP) to grow by 30 basis points to 4.3% next year.

“The most important development in the past month is earlier reopening with a faster pace. Our analysis has taken into account a transitional pain period before the economy enters a strong recovery,” JPM said.


Also on AF: US Fears China Flooding Global Market With Older Chips


However, fellow banking giant ING is less optimistic. The loosening of strict Covid-19 restrictions in China is unlikely to be the silver bullet the local economy needs, chief economist at ING, Iris Pang, said last week, after China announced the removal of its remaining coronavirus laws.

“Moving from isolation facility quarantine to home quarantine will not increase retail sales significantly,” she wrote.

“In short, economic growth in December and January will not be overly impressive, though we expect a quarter-on-quarter improvement in GDP from –0.4% year-on-year in the fourth quarter of this year to 3.4% YoY in the first quarter of 2023.”

However, Pang noted that the use of fewer Covid-19 tests will help trim down the fiscal deficit the government is facing.

China’s tough Covid-19 measures has ravaged its bustling industrials sector, stamping out activity in the world’s second largest economy.


  • Reuters with additional editing by Sean O’Meara


Read more:

China Rushing Out Covid Boosters Amid Warning of Deadly Pivot

Global Recession Likely by Mid-2023, JPMorgan’s Dimon Warns



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond