Morgan Stanley raised China’s GDP forecast

Morgan Stanley expects that by the end of next year’s first fiscal quarter, China’s economic activity will recover to the levels recorded in June and July 2022. Regarding this, the American bank has raised its China’s GDP growth forecast for 2023 from 5% to 5.4%. It’s expected that the country will manage to exceed pre-pandemic levels by the end of next year.

The bank’s economists noted that despite the disruption of production and consumption processes that occurred in China due to COVID-19 outbreaks, supply chain risks are likely to remain under control. Thus, the country’s economic growth might suffer from a range of short-term problems in the beginning of the year, but generally, it’ll maintain a positive dynamic. 

For the first time since 2019, China’s domestic macro policies and COVID-19 management are well coordinated. According to Morgan Stanley economists, Chinese policymakers work in concert to accelerate the country's GDP growth.

It’s worth noting that other banks have also revised China’s GDP growth forecasts upward. So, Australia & New Zealand Banking Group Ltd., like Morgan Stanley, raised its estimate to 5.4%. Japan’s Nomura Holdings Inc. raised its forecast to 4.8%, which is in line with Bloomberg's consensus estimate.