Fitch revises China 2023 growth forecasts to 5.0% from 4.1%
|Early Wednesday morning in Europe, the global rating agency Fitch came out with upbeat Gross Domestic Product (GDP) growth forecasts for China by saying, “Fitch Ratings has revised its forecast for China’s economic growth in 2023 to 5.0%, from 4.1% previously.”
The rating giant cites recovery in consumption and activity as the key catalysts for the latest optimism, “Evidence that consumption and activity are recovering faster than initially anticipated after the authorities moved away from their “dynamic zero Covid-19” policy stance in late 2022,” said Fitch.
Key quotes
The swift rebound from the Covid shock-wave means that activity in 1H23 will be stronger than we had forecast.
We believe the economic recovery will be primarily consumption-led, as households re-engage in activities previously hampered by health controls.
Despite the forecast upgrade, we expect the economic rebound in 2023 to be less vigorous than that in 2021, when China’s economy posted GDP growth of 8.4%.
We also expect net trade to be a drag on GDP growth in 2023, as a rebound in overseas travel by Chinese consumers will lift services imports, while export demand will be depressed by economic slowdowns in the US and Europe.
Fitch affirmed China’s sovereign rating at ‘A+’ with a Stable Outlook in December 2022.
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