The Wall Street brokerages raised their forecast for gross domestic product growth to 5%, in line with China’s target rate for 2023, and said the slowdown in the world’s second largest economy has ‘hit a bottom”.
Policy momentum since August end has exceeded expectations, Citi economists said in a note, citing a cut in personal incometax, as property prices ease in Tier-1 cities and home loans get repriced.
The brokerage expects retail sales to improve and industrial production to hold steady following a rebound in factory activity.
The upbeat view is a shift from its previous stance in August where it cited disappointing policy support and worries of contagion from the property crisis to cut its forecast for full-year growth to 4.7%.
“Further policy measures could be announced such as product-specific consumption support and further relaxation of administrative controls in the housing market,” JPM economist Haibin Zhu said.
“We would also watch out for a policy scheme (debt swap or debt restructuring) to deal with local government hidden debt.”
Zhu said policy measures to support the surviving private developers could also be introduced.
Source: Economy - investing.com
