NEW YORK – In early 2021, the consensus forecast for Chinese GDP growth this year among 25 major global banks and other professional forecasters was 8.3%. In contrast, the Chinese government’s own growth target was around 6%, lower than the best guesses of 24 out of the 25 institutional forecasters. Did the government know something that outsiders had missed? Did it plan to do something that it regards as desirable even though it might compromise growth?
More recently, international banks have revised down their full-year growth projections for China as the economy’s expansion has slowed. Third-quarter growth was only 4.9% year on year, down from 18.3% and 7.9% in the first two quarters, respectively. The high first-quarter year-on-year growth came in large part because of the negative growth in the first quarter of 2020 due to pandemic-induced lockdowns. The low third-quarter growth is raising concerns about the growth prospects in the fourth quarter and next year.
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