China's 2024 recovery to be 'slow and bumpy'

China’s 2024 recovery to be ‘slow and bumpy’

China looks all but certain to hit its growth goal of about 5% for 2023, shifting attention to whether deflation risks, the housing crisis and a lingering confidence crunch will derail efforts to build momentum this year.

Data due on Wednesday will likely show China’s gross domestic product expanded 5.2% for the entirety of last year, even as the economy probably lost some steam in the fourth quarter.

Retail sales and industrial output are also seen growing in December from a year earlier against a low base of comparison – in late 2022, the country was dealing with a massive Covid-19 outbreak. The start of the year has brought mixed news. Figures on Friday showed China’s consumer prices falling in December for a third month, their longest deflation streak since 2009. Exports, though, are showing signs of stabilisation despite having dropped throughout 2023, a first since 2016.

“The domestic demand recovery will be slow and bumpy as targeted stimulus measures trickle through to investment sectors and the property recovery proceeds at a snail-like pace,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics.

For more news like this visit The Economic Times.