JPMorgan, Goldman, Citi, and Morgan Stanley Release China’s 2024 GDP Forecasts

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Major international investment banks have released annual forecasts predicting a slower growth rate for China’s economy in 2024 compared to 2023. The average prediction among five firms, including Goldman Sachs and Morgan Stanley, suggests a 4.6% increase in real GDP this year, down from the 5.2% expected for 2023.

China is expected to release its GDP figures for 2023, with an official target of around 5% growth for the year. Premier Li Qiang mentioned at the World Economic Forum that the Chinese economy grew by approximately 5.2% last year.

The forecasts from the banks vary, with JPMorgan having the highest estimate at 4.9%, while Morgan Stanley has the lowest at 4.2%. The average forecast points to a 4.6% growth rate for 2024.

JPMorgan’s Chief China Economist Haibin Zhu emphasized the need to manage downside risks, particularly from a correction in the housing market. The analysts expect deflation pressure to fade in 2024, but low inflation to persist due to insufficient domestic demand.

Goldman Sachs analysts noted that the Chinese economy did not follow the expected script in 2023 and anticipate macro policy to ease notably in 2024 to support the economy. The International Monetary Fund (IMF) also raised its 2023 growth forecast to 5.4% but expects growth to slow in 2024 to 4.6% due to weakness in the property market and subdued external demand.

The long-term outlook suggests a further slowdown in China’s economy, with UBS expecting annual GDP growth to slow to around 3.5% in the years following 2025. The housing slump is seen as a restricting factor for deploying stimulus. UBS analysts see growth potential in China, particularly in rural-to-urban migration, investment in manufacturing, services, and renewable energy.

Premier Li stated that China did not resort to massive stimulus and emphasized a focus on long-term sustainability over short-term growth. Despite an expected slowdown, China’s growth rate remains faster than that of developed economies, with the IMF forecasting slower U.S. real GDP growth in 2024.