© Reuters. FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/File Photo
(Reuters) -J.P.Morgan trimmed China’s growth forecast for 2023 after the country’s economy grew at a weaker pace in the second quarter, with the post-COVID momentum faltering rapidly.
JPM Economists led by Haibin Zhu said on Monday they now expect China’s economy to grow 5% this year against an earlier estimate of 5.5%.
On a year-on-year basis, China’s economy grew 6.3% in the second quarter, accelerating from 4.5% in the first three months of the year, but the rate was well below the expectations for growth of 7.3%, as demand weakened at home and abroad.
Chinese authorities face a daunting task in trying to keep the economic recovery on track and putting a lid on unemployment, as any aggressive stimulus could fuel debt risks and structural distortions.
“We expect the government to step up policy easing measures after the disappointing Q2 GDP report”, Zhu said.
The global brokerage believes that a 10 basis point policy rate cut in Q4 and nationwide housing policy easing including a relaxation of down-payment requirements could be possible steps the government could take to boost economic growth.
