Technical Analysis

UBS have downgraded their China GDP forecast for 2022 but upgraded 2023

UBS forecasts for economic growth in China:

  • expects a weaker Q4 GDP for 2022 (UBS citing the rising number of COVID-19 cases), and for the full year expects +2.7% from 3.1% previously
  • upgraded 2023 outlook to 4.9%, from 4.5% previously (citing earlier & faster reopening)

From the note:

  • the Central Economic Work Conference will likely make stabilizing growth a priority, with supportive macro policies for 2023
  • expect that fiscal policy will stay proactive
  • expect a small increase of headline deficit
  • expect new special local government bonds, monetary and credit policy to keep supportive
  • continued ample liquidity but unlikely any additional policy rate cut

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