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BNP Paribas forecasts China's GDP growth at 5.0% year-on-year for Q1 2026 and 2025, with a moderate slowdown anticipated in 2026. The bank identifies a K-shaped economic divergence: robust export performance contrasts with weak domestic consumption and a lingering property sector crisis. Policy support remains limited, focusing on structural reforms rather than aggressive stimulus.
This divergence impacts global markets, particularly trade-dependent economies. Strong Chinese exports could benefit commodity producers and exporters in the Gulf, while weak domestic demand may pressure global manufacturing sectors. Traders should monitor policy responses to the property crisis, which could influence risk sentiment and capital flows.
For MENA investors, the outlook suggests cautious positioning in Chinese-linked assets. The property sector's challenges may affect Gulf real estate investments in China, while export strength could support energy demand. Key watchpoints include upcoming policy announcements and trade data from China.
