Citi has published a note from global chief economist Nathan Sheets. Its wide-ranging but I have pulled out comments on China (the full piece is here if you are interested in more).
In brief:
- The forecast for China’s 2023 growth has been boosted from 4.7% to 5.3%
- 2024 forecast unchanged at 4.6%
- notes early signs that the Chinese economy has reached a cyclical trough, with consumer spending looking like it’s climbing back and those consumers likely having ample savings to support a further cyclical bounce
- actions taken by the People’s Bank of China have helped put a floor under the ailing property sector as well as providing more general support
- But ... China’s deeper structural challenges, which begin with elevated indebtedness and the need to make household consumption a more central part of the growth process and extend to challenging demographics and geopolitical tensions with the United States
