Despite the encouraging momentum, three concerning factors are still at play. First, fixed asset investment in real estate continued to edge downward to -9.1% in September from -7.9% in June, posing concerns about the potential spillover effect on the sector, including local governments’ finances. Second, the CPI remains hovering around 0%, which signals stagnant demand. Third, China’s geopolitical relationship with the West remains a concern, especially after the US' decision to tighten export controls on China. Given the better-than-expected growth figure in Q3, we forecast the momentum to persist towards the end of the year, and thus raise our GDP forecast to 5.2% for the whole year of 2023 from 5% previously. As regards 2024, the housing market will continue to drag growth but is likely to be less so than in 2023. - Natixis
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