📝 China GDP Growth Forecast Risks Tilted to The Downside: Nordea

China’s GDP growth (5.4% y/y and 1.2% q/q) surprised to the upside at the beginning of the year. Although the GDP numbers often raise questions, there is evidence that China’s growth actually was rather broad-based and robust in January-March.

Growth was driven by stronger consumption (retail sales were up by 5.8% y/y) and fixed asset investments in manufacturing and infrastructure also increased at a steady pace (up by 9.1% and 5.8% y/y, respectively). Export growth benefited from front loading prior to the trade war and exports were up by 6.9%. At the same time, the negative effect from the housing market downturn became somewhat smaller.

China’s National People’s Congress (NPC) again set the official growth target for 2025 at 5%, which we don’t view as a realistic target although the official numbers probably will point to that direction. Prior to the escalation of the trade war, our forecast for China was 4.5%, but recent weeks imply that risks are clearly biased to the downside. - Nordea