ANZ increases the growth forecast on Chinese GDP for 2023

As Australia & New Zealand Banking Group Ltd (ANZ) reports, it is expected that next year Chinese GDP will increase by 5.6%. Such forecasts appeared after the government of China had reviewed the restriction related to the coronavirus epidemic and supported the real estate sector. 

Bank analysts Raymond Yeung and Zhaopeng Xing declared that the bank previously was predicting 4.2% growth for 2023, but now it has increased the forecast. As for 2022, this forecast didn’t change and remained at the 3% level. It occurred because the zero-COVID policy and problems in the real estate market reduced the growth potential nearly by 2.3%. 

Analysts added that the changing in anti-COVID measures shows that the Chinese authorities strive to stabilize the situation even without a specific schedule. Measures to support the real estate market will give a positive result because the “three red line” restrictions on lending to the sector are nearly terminated. 

Also, Yeung and Xing indicated that policy relaxation has certain risks. First, there is a risk of numerous lockdowns since, with the current coverage, vaccination does little to deter the infection rate. Demand for real estate will likely remain low since the situation in the labor market has worsened.

 ANZ supposes that the Chinese GDP will reduce to 4% in 2024 because of the structural impediments and base effect.