MP Econ Issue 18: 3Q2023 Outlook: Chinese Economy Bottoms Out
Key Takeaways:
Quarterly growth will likely bottom out at ~4%, as no “big bang” stimulus is forthcoming.
Stimulus measures will take the form of modest fiscal spending to stabilize growth, but are insufficient to the task of supporting the private sector and boosting household consumption.
Anemic property sales are a downside surprise that will magnify risks and weigh on consumption.
As such, we maintain our view that the big growth spurt already happened in 1Q, suggesting Beijing is content to simply meet its unambitious 5% growth target this year.
Houze Song is a fellow at MacroPolo. You can find his work on the economy, local finance, and other topics here.