BBVA drops China GDP growth forecast to 3.6%
SHANGHAI -- The Chinese economy has experienced a bumpy recovery since the Shanghai COVID lockdown was lifted. Main indicators dropped again in July after a temporary bounce-back in May.
BBVA Bank says GDP figures have confirmed the slowdown pattern, from 4.8% y/y in Q1 to 0.4% y/y in Q2. "We lowered our 2022 prediction from 4.5% to 3.6% (IMF: 3.3%, Bloomberg consensus: 3.4%) and anticipate growth will bounce back from the Q2 trough in Q3 and Q4," the bank says.
"The recovery path will be similar to that of the Wuhan COVID lockdown, with the supply-side to surpass demand-side recovery.
BBVA has lowered its 2022 GDP growth prediction from 4.5% to 3.6%, and confirms that China's Zero-COVID policy is hindering consumption and supply-side recovery.
Authorities have given up on their 5.5% growth target, the bank says, indicating that monetary and fiscal stimulus will become more prudent rather than appearing as a deluge of massive stimulus going forward, BBVA says
In real estate, China's main housing indicators have stayed in negative territory for the past half year, adversely spilling over to its upstream and downstream sectors.
Meanwhile, China's low inflation environment persists due to the sluggish domestic demand.