China
China’s economic growth lost steam in Q2 after a strong post-pandemic recovery at the start of the year. The country’s real GDP is expected to grow 5.3% this year—higher than 2022 but lower than the annual average of 7.7% from 2010 to 2019.
Inflation continues to decline with another downward quarterly revision for 2023. The latest projection puts inflation at 1.9% in China this year.
Consumer prices dropped in July—the first decrease since February 2021. Producer prices continued to decline due to lower commodity and raw material prices, easing supply chains and weaker demand.
Four challenges weigh on China’s outlook: slowed economic recovery, lower business investment, intensifying deflationary pressures and the growing risk of deeper slumps in the property and financial markets.
Business and consumer confidence remains weak. The government pledged to reduce market barriers, improve competition policies and enhance the business environment for private companies, but additional measures may be needed to restore confidence and support the economic rebound.
China: Q3 Forecasts
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards is forecast, updated July 2023. Annual rates in percentages. Revisions in percentage points.