According to Li Qiang (China's Premier), the economic growth of China during the 2nd quarter will be higher than the Q1. In addition, he also added that the economic growth in China will likely touch 5% on an annual basis. These views were shared at the World Economic Forum (WEF) on Tuesday.
These comments come at a time when the factory output in China has slowed down amid weak domestic & external demand. According to Li, they are taking effective yet practical measures to ensure that domestic demand is expanded. In addition, the government is also working to work on market vitality through coordinated development.
Through these measures, they are trying to open up the Chinese economy to the outside world and thus tap into new investment opportunities. But despite Li's comments, analysts have downgraded China's economic growth forecasts for 2023.
Banks Have Downgraded China's GDP Growth
Many prominent banks around the world have cut their GDP growth forecast for China after the dismal retail sales and industrial sales data of May. These economic releases have missed the forecasts and thus have cast doubts about the post-COVID recovery of China.
During the first three months of 2023, China's GDP growth was 4.5% on a YoY basis, but that momentum is no longer to be seen. However, many experts are still optimistic that Q2 economic growth will be higher than Q2 2022.
Just recently, Li returned from foreign tours of France and Germany, where he talked about resolving the differences between China and Europe.
He also added that invisible barriers are put up by some forces which have led the world towards confrontation and fragmentation. To solve these issues, he emphasized the need for a de-risk policy toward the economic and diplomatic relationships with China.
For now, it appears that China will have to roll out stimulus packages to ensure that its economic growth is up to the forecasts set by the PBOC and economists.