Goldman, Morgan Stanley raise China’s ’24 growth outlook

Goldman Sachs Group and Morgan Stanley raised their outlook for China’s economic growth this year as factory activity and exports accelerate more than expected.

China’s economy likely expanded at a 7.5 per cent annualised pace in the first quarter from the prior three months, Goldman economists led by Hui

Shan said in a note Wednesday — higher than their 5.6 per cent prior estimate. The bank now sees 2024 growth forecast at 5 per cent , in-line with Chinese policymakers’ target, versus 4.8 per cent previously.

Morgan Stanley also lifted its 2024 growth forecast, to 4.8 per cent from 4.2 per cent previously, citing better-thanexpected export growth from resilient US demand and robust export volume. Beijing’s increased focus on supply-chain upgrade is also expected to lead to stronger capital expenditure in the manufacturing sector, according to a report dated Wednesday.

The world’s second-largest economy has struggled to regain momentum as the property sector and consumer spending remain weak, though data so far this year have shown green shoots in factory activity and trade. Data next week is set to show the economy expanded at a 5 per cent yearon-year pace in the first quarter from 5.2 per cent at the end of last year, according to forecasts. Deflationary pressures remain, with consumer prices barely increasing from a year earlier last month, according to data released Thursday.

The upward revisions come after a key gauge of factory activity — the Caixin manufacturing PMI — indicated a fifth straight month of expansion in March, with official government data also showing a rebound. Exports have also increased amid rising global demand for technology goods.

According to data, deflationary pressures remain, with consumer prices barely increasing from a year earlier last month