After Wall Street banks lowered their growth forecasts for China, the survey also showed that expectations for a worsening economic outlook in China have increased.
Despite the stimulus messages from the authorities in China, the forecasts that economic growth will be limited in the medium term dominate.
According to the projections of economists surveyed by Bloomberg, China will grow by 5.2 percent in 2023. In the previous survey, this growth was estimated at 5.5 percent.
The growth expectation for 2024 decreased from 4.9 percent to 4.8 percent. A wide-scale loss of momentum is observed in the sub-items of Chinese growth, especially in consumption and declining real estate prices.
Although the Chinese Politburo was dovish in policy, it did not meet expectations for large-scale stimulus. Tuuli Koivu, Nordea Markets Chief Economist, said that he does not expect a stimulus on a scale that could accelerate Chinese growth.
Projecting a growth of 4 percent in 2024, well below the consensus of the Bloomberg survey, Koivu said, “I see the risks on the downside. This is the new normal situation we have to get used to,” he said.
While the economists’ estimation of 25 basis points cut in Chinese required reserves for the July-September period did not change, the expectation of a 10 basis point reduction in the one-year benchmark loan rate instead of 5 basis points was reflected in the survey.