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DBS economists Radhika Rao and Mo Ji have revised their forecast for China's GDP growth, projecting a decline from 5.0% year-on-year in Q1 to 4.8% in Q2. The slowdown is attributed to uneven momentum across sectors, with manufacturing and exports showing resilience while domestic consumption and real estate activity remain weak. The report highlights structural challenges, including a property sector crisis and youth unemployment, which continue to weigh on economic recovery.
This projection could impact global markets, particularly affecting trade-dependent economies and commodity exporters. A weaker-than-expected Chinese growth trajectory may dampen demand for raw materials and reduce export revenues for Gulf and Asian economies. Traders should monitor policy responses from Beijing, including potential fiscal stimulus measures, which could influence global risk sentiment and currency markets.
For investors, the uneven growth pattern underscores the need for sector-specific strategies. The yuan's performance against the USD/CNY pair may face pressure if policy interventions fail to stabilize domestic demand. Key indicators to watch include upcoming trade data and central bank statements from China, which could provide further clarity on economic direction.
