J.P. Morgan Elevates China's 2024 Growth Forecast Amid Optimistic Economic Indicators
J.P. Morgan has revised its growth forecast for China's economy in 2024, raising it from 4.9 percent to 5.2 percent. This optimistic outlook was shared by Zhu Haibin, J.P. Morgan's chief China economist, during the J.P. Morgan Global China Summit held in Shanghai on Wednesday.
Zhu Haibin highlighted the impressive 5.3 percent year-on-year economic growth China achieved in the first quarter of 2024, which exceeded market expectations and set a robust tone for the year. This strong performance underpinned J.P. Morgan's decision to adjust its growth forecast upwards.
Zhu identified three primary drivers behind the first quarter's economic surge: a notable increase in industrial added value, which outpaced the overall economic growth; the diversification of China's export products and destinations; and the emergence of new technologies and industries fueling economic expansion. These factors collectively signal a resilient and evolving Chinese economy poised for sustained growth.
In addition to economic growth, Zhu forecasted stability for the Chinese yuan. He acknowledged short-term depreciation pressures against the U.S. dollar but expressed confidence that these would diminish as the U.S. Federal Reserve is expected to cut interest rates in the latter half of the year. "The exchange rate of the renminbi will remain largely stable throughout the year," Zhu asserted.
Reflecting on fiscal and monetary policy coordination, Zhu had previously noted in April that China is likely to see more accommodative fiscal policies in 2024. He emphasized a shift towards a more transparent budgetary fiscal deficit and anticipated increased fiscal deficit spending by the central government to alleviate local governments' financial strains. Furthermore, Zhu projected continued fiscal support prioritizing investments in infrastructure for new economy sectors and research and development for manufacturing upgrades.
The J.P. Morgan Global China Summit, now in its 20th year, remains one of the preeminent annual gatherings of business leaders in China. This year's event, held on May 23-24, 2024, in Shanghai, brought together over 2,500 international delegates. The Summit serves as a crucial platform for connecting the global investment community with China's market, fostering dialogue on the pivotal themes shaping the investment landscape in China and beyond.
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