China’s‍ Economic ⁤Growth Estimates Slashed Amid Confidence Slump

Investment Banks Cut Forecasts as Beijing Struggles to Meet 5% Target

Major investment banks are revising their growth estimates for China’s⁤ economy downward, predicting that ⁢the country may miss its official target of around ‍5% due to a decline in confidence in the world’s second-largest economy.

Bank of America has revised its growth forecast for China from 5% to 4.8%, while TD Securities has cut its estimate from⁢ 5.1% to 4.7%. These ⁢adjustments⁣ follow a series of similar corrections⁣ made over the summer, including UBS’s recent forecast⁣ cut.

Economists at Citi have warned that ⁣Beijing ‍may fall short of its economic growth target, which is the lowest in decades.⁢ Concerns about China’s economy are growing, with the real⁢ estate sector‌ facing a prolonged slowdown ‌and consumer and investor confidence declining.

The median forecast‌ for China’s annual GDP growth has fallen to 4.8% from 4.9% in mid-August, according to a Bloomberg survey of dozens of economists.

China’s Economic Growth: A ​Decades-Long Trend‍ Reversal

Last year, the Chinese economy grew‌ by 5.2%, in line with expectations. However, this year’s growth engine has shown signs of slowing down, with the⁤ economy facing a crisis of confidence.

For decades, China’s GDP growth has ⁣consistently ⁢exceeded government targets ⁤set at the beginning of each year. However, after ‌the Covid-19 pandemic, these⁣ figures⁣ have come under closer scrutiny.

Weaker-than-expected second-quarter growth of 4.7% in⁢ July triggered a series of downward‍ revisions to forecasts. Goldman Sachs, Citi, and Barclays have all cut ​their full-year growth estimates ⁢to 4.9%, 4.8%, and 4.8%, respectively. JPMorgan now⁢ expects growth of 4.6%.