China’s Economy Expected to Grow at Slower Pace in 2024, Says Study
Major international investment banks have released annual forecasts indicating that China’s economy will experience slower growth in 2024 compared to 2023. The average prediction among five firms, including Goldman Sachs and Morgan Stanley, forecasts a 4.6% increase in real GDP this year, down from an expected 5.2% growth in 2023.
China is scheduled to release its GDP figures for 2023, with an official target of approximately 5% growth for the year. Premier Li Qiang stated at the World Economic Forum in Davos that the Chinese economy grew by approximately 5.2% in the previous year. The official growth target for this year will be revealed at an annual parliamentary meeting in early March.
China GDP Forecasts
| Firm | 2024 | 2023 |
|---|---|---|
| Goldman Sachs | 4.8% | 5.3% |
| UBS | 4.4% | 5.2% |
| Citi | 4.6% | 5.3% |
| JPMorgan | 4.9% | 5.2% |
| Morgan Stanley | 4.2% | 5.1% |
| Average | 4.6% | 5.2% |
Among the five bank forecasts analyzed by , JPMorgan had the highest at 4.9%, while Morgan Stanley had the lowest at 4.2%. JPMorgan’s Chief China Economist and Head of Greater China Economic Research, Haibin Zhu, emphasized the need to manage downside risks, particularly from the housing market correction and its spillover effects, as an important task in 2024. The analysts also noted that while certain sectors like technology have experienced rapid growth, they are not enough to offset the drag on growth caused by the housing market and other factors.
China’s economy, the world’s second-largest, has faced challenges in recent years, including the impact of Covid-19 restrictions and a slump in the real estate market. Despite growth in sectors such as tourism and electric cars, the country’s economy did not rebound as quickly as expected. Goldman Sachs analysts highlighted the rare decision by Beijing to increase the official fiscal deficit in October, noting that they expect macro policy to ease notably in 2024 to support the economy.
The International Monetary Fund (IMF) raised its 2023 growth forecast for China to 5.4% from 5% due to China’s policy announcements. However, the IMF still anticipates a slowdown in 2024 to 4.6% due to weakness in the property market and subdued external demand.
Premier Li stated that China did not resort to massive stimulus and avoided seeking short-term growth while accumulating long-term risks. Analysts generally expect China’s economy to slow further from its high base in the long term. UBS, for example, forecasts annual GDP growth to slow to around 3.5% in the years following 2025, partly due to the housing slump. This slump will also limit the extent to which China can implement stimulus measures.
Despite these challenges, UBS analysts believe there is still growth potential in China, particularly through the movement of workers from rural to urban areas, investment in manufacturing, services, and renewable energy. Even at a growth rate of 3% to 4%, China’s pace of growth remains faster than that of developed economies. In comparison, the IMF forecasts a slowdown in U.S. real GDP growth to 1.5% in 2024 from 2.1% in 2023.
