Nomura Holdings Inc. lowered its forecast for China’s economic growth to 3.9 percent as China’s insistence on implementing a zero-covid policy has weighed on the economy more than expected. Monetary policy can be sustained.
Bloomberg News reported that Nomura’s Economist Group including Mr. Ting Lu wrote in a note that The company downgraded its forecast from 4.3% as high-frequency trading data deteriorated sharply in April. Coupled with the logistics of China, there are problems. As more and more cities have been ordered by the authorities to lockdown in whole or in part to contain the spread of COVID-19. At the same time, there are no signs that the Chinese government will end its Zero Covid policy anytime soon.
if it actually happens A 3.9% growth rate in 2022 will be China’s worst economic expansion since 1990.
Mr. Lu revealed to Bloomberg TV that Nomura expects China to provide additional policy support this year. by reducing the reserve requirement ratio (RRR) by 0.25% and reducing the policy rate by 0.10%, but Mr Lu warned that the economic recovery will still have obstacles. Unless China changes its strict guidelines on COVID-19 control.
The Chinese government has tried to stabilize its supply chain and inject liquidity through various stimulus measures, but its effectiveness remains questionable. Because President Xi China’s Jinping He reiterated his commitment to the Zero Covid Policy by reiterating his support for the policy at the Bo Ao Forum for Asia (BFA) meeting on Thursday (April 21).
Nomura also lowered its growth forecast for the second quarter to 1.8 percent from 3.4%, adding that it had “higher negative risk than positive” for the second quarter and the second half of the year. this