China’s economic growth could drop below 6% next year for the first time since 1990 as the world’s second-largest economy continues to be affected by the trade war with the US and cooling infrastructure investment, UBS Wealth Management forecasts, reported Caixin.
Real gross domestic product (GDP) is set to increase by just 5.7% in 2020, according to Hu Yifan, regional chief investment officer and chief China economist at UBS Wealth Management, a unit of Switzerland-based banking group UBS AG. That compares with an estimated 6.1% in 2019 and would mark the third straight annual slowdown.
China’s GDP growth slipped to 6.6% in 2018 from 6.8% the previous year, and was 6.2% year-on-year in the first nine months of 2019, the National Bureau of Statistics said in October.
Hu isn’t the only analyst forecasting sub-6% GDP growth in 2020. Nomura Holdings Inc., Goldman Sachs Group Inc. and Moody’s Investors’ Service estimate expansion of 5.8%. Morgan Stanley is a little more optimistic, with a base case scenario of 6%, although its economists say growth could slip to 5.9% if the trade war worsens and the property market slumps, and could fall as low as 5.3% in a worst-case scenario where trade talks with the US break down and more tariffs are imposed by Washington on Chinese goods.