China’s growth outlook improves

Morgan Stanley analysts have raised their forecast for China’s economic growth in 2023, predicting an earlier and sharper rebound in activity. The country’s gross domestic product is seen growing 5.4% next year, up from a previous projection of 5%.

“We had previously expected a rebound in activity to materialize from late 2Q23. Now we are projecting mobility to improve from early March,” analysts said on Tuesday, adding that they expect to see a “faster and sharper rise in mobility” to be reflected in the economy starting in the second quarter.

They also noted that Chinese policymakers are “taking concerted action to lift growth across all fronts.” 

“This is the first time since 2019 where domestic macro policies and Covid management are aligned in supporting a growth recovery, rather than acting as countervailing forces,” the economists wrote.

Meanwhile, China’s state-run think tank CASS reportedly projected on Tuesday that the economy will expand by 5.1% next year.

Senior Chinese officials are currently debating an economic growth target of around 5% for next year, according to Bloomberg. The outlet notes, however, that the government’s official target won’t be made public until the National People’s Congress meets in March.

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