Morgan Stanley, Goldman boost China growth outlook

Goldman Sachs Group Inc. and Morgan Stanley raised their outlook for China’s economic growth this year as factory activity and exports accelerate more quickly than expected, reports Caixin. China’s economy probably expanded at a 7.5% annualized pace in the first quarter from the previous three months, Goldman economists led by Hui Shan said in a note Wednesday—higher than their 5.6% previous estimate. The bank now sees 2024 growth forecast at 5%, in line with Chinese policymakers’ target, rather than the 4.8% previously quoted.

Morgan Stanley also lifted its 2024 growth forecast, to 4.8% from 4.2%, citing better-than-expected export growth from resilient US demand and robust export volume. Beijing’s increased focus on supply chain upgrades is expected to lead to stronger capital expenditure in the manufacturing sector, according to a report dated Wednesday.

The world’s second-largest economy has struggled to regain momentum as the property sector and consumer spending remain weak, though data so far this year have shown green shoots in factory activity and trade.