China's economy to grow 5.3% this year: AMRO report
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The news: China's economy is forecast to grow 5.3% in 2024, boosted by a stabilising property sector and improving external demand, according to a new report by the ASEAN+3 Macroeconomic Research Office (AMRO).
The numbers: AMRO's forecast is above both China's own GDP growth target of 5% set last month, and last year’s growth of 5.2%. AMRO's growth forecast for the wider ASEAN+3 group of 4.5%, up from 4.3% in 2023.
AMRO said the ASEAN+3 region is expected to continue to be an "engine of growth" in the global economy over the medium-term, growing faster than the world average and contributing around 45% of global growth in 2024 to 2030.
AMRO is an international organisation the 10 member states of the Association of Southeast Asian Nations (ASEAN), plus China, Japan and South Korea.
The context: Despite slowing trade between the US and China, AMRO said there are "initial signs" that increased US consumer spending on goods is boosting external demand for exports. Meanwhile, the semiconductor industry is expected to rebound from a multi-year slump as demand from China recovers “briskly” in the second half of 2024.
The report said China's macroeconomic fundamentals remained sound and its recovery was expected to further normalise in 2024. Consumption would continue as the primary driver of growth while investment might gain greater traction in the later months.
It also said that the real estate sector's recovery would be gradual as fixed asset investments were subdued and funding for property development remained tight. While there were policy measure in place to ensure the sector's recovery, it would need time to take full effect.
AMRO noted that ASEAN+3 nations were likely to experience resilient domestic demand underpinned by recovering investment and firm consumer spending. Export recovery, especially in semiconductors, and tourism was expected provide an additional lift to growth.
Elsewhere, global commodity prices are set to normalise but rising domestic demand, geopolitical tensions between the US and China, and country-specific government actions are set to keep upward pressure on prices.
The source: ASEAN+3 Macroeconomic Research Office
