China: Growth set to slow slightly into 2027 – Danske Bank

FXStreet Insights Team FXStreet

Danske Research Team expects China to maintain its two-speed pattern, with weak domestic demand and strong exports and technology. They project Gross Domestic Product growth of 5% in 2025, easing to 4.8% in 2026 and 4.7% in 2027. The bank sees overcapacity persisting, even as deflation pressures ease and housing headwinds gradually diminish.

Growth slows as overcapacity persists

"China continues to be a two-speed economy with domestic demand being weak while exports and tech powers ahead."

"After another year of 5% growth in 2025, we look for a slight softening to 4.8% in 2026 and 4.7% in 2027, unchanged from our December forecasts."

"We expect the composition of growth to be broadly unchanged in 2026 with sluggish consumption growth while exports are set to remain strong. The drag from housing should ease as construction levels have already fallen substantially."

"We expect overall supply to again outpace demand leaving overcapacity in place. However, there are signs that deflationary pressures are easing."

"In the new Five-Year Plan, China doubles down on tech and puts more weight on consumer demand. It requires new and more forceful measures to stabilize housing, which we believe will take some time still."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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