American bank Morgan Stanley has lowered its estimate for China’s economic growth this year to 4.7 percent, down from the previously projected five percent.
Morgan Stanley has also reduced its forecast for China’s GDP growth for 2024, from 4.5 percent to 4.2 percent.
Beijing, on the other hand, has set an annual growth rate of around five percent for this year.
This Wall Street bank is the latest in a series of major brokerage firms to lower their forecasts for China’s economic growth this year due to disappointing economic data.
Earlier this week, J.P. Morgan reduced its forecast for China’s GDP growth for 2023 to 4.8 percent, down from the previously expected five percent, while Barclays lowered it to 4.5 percent, Reuters recalls.
Among the reasons for lowering projections for the world’s second-largest economy are concerns about the struggling real estate sector there.
Namely, the Chinese real estate sector has been grappling with a liquidity crisis since late 2021 when China Evergrande Group collapsed and triggered a wave of insolvencies in that sector.
Morgan Stanley has lowered its estimates to “account for a sharper slowdown in capital expenditures due to deleveraging in the real estate sector and financing from local authorities, with indirect effects on consumption,” the economists led by Robin Xing wrote in a note.
