China: Four reasons why growth could be better than expected in 2022 – Morgan Stanley
Analysts at investment bank Morgan Stanley remain bullish on the Chinese growth story in 2022, as they cite four key reasons why they expect the above forecasts growth.
Key quotes
“The pace of tightening proved to be too aggressive, considering that the recovery in consumption growth was curtailed because of the Delta wave and China’s continued Covid-zero approach, which kept consumption below trend.”
Still, the bank said it is “more bullish than consensus” and sees GDP growth in China accelerating to 5.5% in 2022.”
“Policymakers have already hit pause on their deleveraging efforts and have started to ease both monetary and fiscal policies in the last few weeks.”
“More relief for China’s real estate sector ahead.”
“The energy targets and goals to reduce power consumption also turned out to be “too aggressive” as China’s GDP growth relies heavily on industrial production.”
“China’s zero-Covid approach has prevented disruptions to factory production and even led to a rise in its share of global exports.”
“A favorable global backdrop should further drive strong trade growth.”
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
