According to a recent Reuters poll, China’s economic growth is anticipated to hit 4.6% in the first quarter of 2024, marking a drop from the 5.2% recorded in the previous quarter and representing the slowest pace since early 2023.
Experts attribute this deceleration to several factors, including the lingering downturn in the property market, which continues to suppress demand, and a prevailing sense of caution among private businesses and consumers regarding spending.
Achieving the government’s ambitious target of 5% growth for the year now appears increasingly daunting, with analysts pointing out that the seemingly robust growth in 2023 was partly inflated due to a comparison with the pandemic-affected figures of 2022.
Despite an optimistic start to the year, recent data on exports, inflation, and lending trends paint a worrying picture of potential momentum loss, raising speculation about the need for additional government intervention to stimulate demand.
However, some analysts, such as Zong Liang, chief researcher at Bank of China, remain optimistic, suggesting that first-quarter growth could approach 5%, with the target still within reach thanks to available “policy space” for implementing stimulus measures.
The poll also predicts a modest uptick in quarterly growth to 1.4%, compared to the 1.0% seen in the final quarter of 2023.
As China prepares to release official GDP data in the coming days, the spotlight intensifies on the nation’s economic vitality and the potential necessity for further stimulus measures to sustain growth.
