Fitch Ratings raises China GDP forecast
Analysts have raised their estimates for China’s gross domestic product to 5.2 per cent.
China.- Fitch Ratings has increased its forecast for China’s gross domestic product (GDP) growth for 2023 to 5.2 per cent, up from a previous estimate of 4.1 per cent made in December 2022. The report from Brian Coulton, Fitch’s chief economist, notes that China accounts for 60 per cent of the projected 2 per cent global growth forecast for 2023.
However, she said the recovery could be hindered by “ongoing weakness in the property sector” and “a slowdown in external demand.” The report suggested that “hard economic data for January and February are still scarce, but high-frequency mobility indicators, purchasing manager index (PMI) surveys and anecdotal reports all suggest a rapid rebound is underway in activity and spending.”
Despite a brief impact on activity after an initial surge in Covid-19 cases, Fitch is expecting a 1.4 per cent quarter-on-quarter expansion in GDP in the first quarter of 2023. There has been an increase in spending on “contact-intensive” services such as restaurants, entertainment, travel, and accommodation.
Meanwhile, investment analysts have identified the full reopening of borders between mainland China, Macau and Hong Kong as a crucial measure to revive Macau’s tourism industry and support its gaming sector.
In February, the University of Macau predicted that the local economy will grow between 20.5 and 44.1 per cent this year, resulting in government revenue of between MOP55bn (US$6.7bn) and MOP66.1bn.