Big Blow to China: S&P Global cuts 2023 growth forecast to 5.2% from 5.5%

S&P Global has cut its 2023 GDP growth forecast for China from 5.5 per cent to 5.2 per cent after May data showed a post-COVID recovery was faltering in the world’s second-largest economy.

In a research note, credit rating agency S&P said, “We have reduced our 2023 GDP growth forecast… China’s recovery should continue but at an uneven pace, with investment and industry lagging.”

Notably, S&P is the first major international credit agency to cut its forecasts for China’s economy this year, although several major banks including Goldman Sachs have lowered their estimates this month.

Goldman Sachs reduced its forecast from 6 per cent to 5.4 per cent, citing persistently weak confidence and the cloud over the property market as stronger-than-expected headwinds.

China’s economy

Last week, China’s National Bureau of Statistics (NBS) released the key economic indicators for May 2023, showing a slowdown in the post-COVID economic recovery compared to data from April.

As per the data, key indicators across manufacturing, services, consumption, investment, and international trade recorded slowed growth but remained positive overall.

The weak data led to further slumping of property investment, industrial output and retail sales growth missing forecasts. It indicated that Beijing will need to do more to shore up a shaky post-pandemic recovery.

After the data was released, China’s central bank has cut interest rates again. This is seen as another attempt to kickstart an economic engine still sputtering in the aftermath of COVID.

The Asian nation is expected to roll out more stimulus to support a slowing economy this year, a report by Reuters quoted sources involved in policy discussions saying.

With inputs from Reuters

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.