📝Revising China 2025 GDP Forecast to 5.0%: Natixis

Without stronger and more lasting stimulus measures, particularly the ones targeting service consumption, sustaining the momentum from first half will be challenging. Investment too, remains a significant concern. With the persisting deflationary pressure where PPI wanders below -3% and CPI sticks around zero, companies are forced to curb investment in fear of bigger losses due to overcapacity but also the ongoing anti-involution campaign. This situation is particularly alarming considering the deep negative growth in real estate investment and stubbornly declining property prices.

The Chinese economy has a greater likelihood of meeting the government’s growth target, there are significant uncertainties down the road. Despite foreseeable headwinds from trade friction and persisting deflation, the government does have more bullets for further stimulus if needed. Therefore, we have revised our forecast of China’s GDP growth to 5% for 2025 and 4.5% for 2026. - Natixis