BEIJING, May 16 (Reuters) – Several major banks are pledging to invest in China by 2023, after May figures showed the world’s second-largest economy’s post-coronavirus recovery was stalling. It cut its forecast for gross domestic product (GDP) growth for 2020.
Nomura Bank includes UBS (UBSG.S), Standard Chartered (STAN.L), Bank of America (BoA) (BAC.N) and JP Morgan (JPM.N).
The bank now expects China’s gross domestic product (GDP) to grow between 5.1% and 5.7% this year, down from the previous range of 5.5% to 6.3%. ing.
Thursday’s data showed China’s economy stumbled in May with weaker-than-expected growth in industrial production and retail sales, and the government needs to do more to shore up a shaky post-pandemic recovery. I had high hopes that it would.
The government set a modest GDP growth target of around 5% for this year after falling short of its 2022 target by a significant margin.
UBS economists said in a memo on Friday that they had cut their GDP forecast to 5.2% from 5.7% and expected more policy support.
The People’s Bank of China on Thursday cut interest rates on its one-year medium-term lending facility for the first time in 10 months, paving the way for a benchmark loan prime rate (LPR) cut next week.
Economists at Standard Chartered cut their growth forecast for 2023 to 5.4% from 5.8% previously.
“More stimulus is likely as China prioritizes improving business and confidence,” economists said in a note.
Standard Chartered cut its second-quarter growth forecast for China to 5.8% from 7%. Given the massive COVID-19 lockdown a year ago, April-June growth is widely expected to be boosted by a lower comparative base.
The BofA cut its 2023 GDP growth forecast to 5.7% from 6.3%, and JPMorgan had earlier cut its forecast to 5.5% from 5.9%.
China plans to roll out more stimulus this year to help its slowing economy, but officials are likely to focus on boosting sluggish consumer and private sector demand, policy advisers said. rice field.
Nomura also cut its 2024 growth forecast for China to 3.9% from 4.2%, while BofA cut its forecast to 5.0% from 5.2%.
Reported by Kevin Yao.Editing: Jamie Freed and Angus Maxwan
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