Major investment banks are upbeat about China's economic trajectory in 2025, raising GDP growth forecasts in recent weeks. With pro-growth policies and productive China-U.S. trade talks in Geneva, financial institutions see fresh momentum for the world's second-largest economy.
Goldman Sachs surprised markets on May 13 by lifting its China GDP growth forecast for 2025 by 0.6 percentage points, from 4.0% to 4.6%. Shan Hui, chief China economist at Goldman Sachs, noted that the bank has upgraded its export value growth outlook to 0% from -5% previously, and now sees net exports contributing 0.1 percentage point to growth, up from a negative 0.5 points.
Nomura followed suit on May 19, citing eased trade tensions and a robust Q1 retail performance. China's National Bureau of Statistics reported a 5.1% year-on-year rise in April retail sales. Lu Ting, chief China economist at Nomura, said the bank has raised its Q2 GDP growth forecast to 4.8% from 3.7%, and nudged Q3 and Q4 forecasts up to 4.0%, bringing the full-year outlook to 4.5%.
J.P. Morgan also sees stronger growth, revising its 2025 outlook to 4.8% from 4.1%. Zhu Haibin, chief China economist at J.P. Morgan, pointed to a broad package of fiscal and monetary measures in the Chinese mainland. Since last September, a more proactive deficit-to-GDP ratio target of around 4% and extra government bond issuance have supported infrastructure and social spending.
Morgan Stanley raised its forecast by 0.3 percentage points to 4.5%, expecting consumer and public spending to pick up. Xing Ziqiang, chief China economist at Morgan Stanley, highlighted an expanded trade-in program for consumer goods and a government debt swap initiative, as well as AI breakthroughs that reinforce China's supply-chain strength and long-term growth potential.
Standard Chartered and UBS have echoed the optimism. A Standard Chartered report on May 21 underlined front-loaded bond issuance as a boost to infrastructure and manufacturing investment. Thomas Fang, head of China global markets at UBS, said the policy mix has injected predictable confidence into businesses and capital markets.
High-profile visits from global banking leaders like Citigroup Chair John Dugan and Carlyle Group CEO Harvey Schwartz underscore foreign investors' renewed willingness to engage with China's long-term development.
As pro-growth measures take effect and trade talks yield results, the consensus among top banks is clear: China's economy is poised for stronger momentum in 2025, presenting opportunities and challenges for businesses and policymakers around the globe.
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Major investment banks raise 2025 China economic growth forecasts
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