Forex News

Analysts raises forecast for China GDP in 2022, cuts 2023. Forecasts higher USD/CNY.

invest on stocks

This via the folks at Danske Bank:

  • We have revised our forecast for 2022 up to 3.3% from 2.8% following strongerthan-expected Q3.
  • However 2023 is revised lower to 4.9% from 5.7% on stronger headwinds from the global economy, later expected end of zero-covid policy and the property crisis continuing for longer.
  • Stimulus puts a floor under growth, but cannot drive a sustained recovery as long as the cloud of uncertainty over covid remains. We look for a modest recovery in 2023 on easing covid policy in H2, paving the way for a lift to home sales and private consumption.
  • In 2024 we look for GDP to grow 5.3% as more pent-up demand is unleashed.

Danske adds they see the “Property crisis continue“.

On the yuan the analysts argue that with US rates far above Chinese the differential argues for higher USD/CNY: