S&P Cuts China GDP Forecast As Calls For Stimulus Intensify  

• S&P Global cut its forecast for China's economic growth this year, underscoring the uneven nature of the country's recovery from the pandemic, spurring calls for further stimulus.
• S&P now expects China to log GDP growth of 5.2% in 2023, down from an earlier estimate of 5.5%. It was the first time a global credit ratings agency has cut China's forecast this year but follows lowered predictions by major investment banks including Goldman Sachs.
• "China's key downside growth risk is that its recovery loses more steam amid weak confidence among consumers and in the housing market," S&P said in a statement on Sunday. In May, property investment slumped further, industrial output and retail sales growth missed forecasts, and youth unemployment hit a record 20.8%. Forecasts for China’s GDP growth this year range between 4.4% and 6.2%.
• S&P said likely measures to bolster the economy could include "easing housing purchasing restrictions and mortgage downpayment requirements, expanding credit and infrastructure financing and, perhaps, fiscal support for consumption."
• China will roll out more stimulus this year, sources involved in policy discussions have said. "We think officials will roll out sufficient policy support to keep the recovery alive but not enough to prevent subdued quarter-on-quarter growth over the rest of the year," said Sheana Yue, a China economist at Capital Economics.

(Source: Reuters)