Economists raise growth forecast on China, following release of better-than-expected economic data

Some investment banks have raised their outlook on China’s economic growth.

Last week, the Chinese government announced that gross domestic product grew by 6.4% year-on-year in the first quarter of 2019. The figure surpassed the 6.3% expected by analysts in a Reuters’ poll. That seems to have led economists at some prominent investment banks to boost their growth expectations for China, as indicated by a CNBC report.

According to the report, economists at Barclays increased their  China GDP growth forecast  for the full-year  to 6.5% from the previous estimate of 6.2 %, citing China’s first-quarter growth beat. The economists indicated better-than-expected effect of China’s government stimulus measures coupled with the apparent firming of the nation’s housing  markets and an improving outlook on exports as factors behind their upward revision to growth prediction.

The report also mentions that Citi raised its annual GDP forecast to 6.6% from 6.2% on Wednesday, owing to what they perceived as higher optimism for a U.S.-China trade deal and improving domestic demand in China.

ING upped its estimate to 6.5% from its previous 6.3%, attributing the forecast revision to China’s infrastructure projects helped by stimulus, and 5G telecoms production in the first quarter.

Some other organizations, however, were a bit more cautious in their outlook albeit amidst increased optimism on first quarter growth.

J.P. Morgan economists expect “solid growth momentum” in the second and third quarters, but believe the impact would eventually taper off by the end of the year. They maintained their overall forecast for this year at 6.4%.

Standard Chartered left its full-year prediction unchanged at 6.4%, while maintaining caution against what they think are risks of over-optimism about China’s growth outlook.