China may 'miss the 5%' growth target this year as downside risks spread
BEIJING — Without more stimulus, China is increasingly likely to miss its growth target of around 5% this year, economists said.
The country on Tuesday suspended releases of data on youth unemployment, which had recently soared to records. Other data for July showed a broad slowdown, worsened by the property market slump.
«Prolonged weakness in property construction will add to destocking pressures in the industrial space and depress consumption demand as well,» Tao Wang, head of Asia economics and chief China economist at UBS Investment Bank, said in a note.
«In such a case, economic momentum may stay subdued in the rest of the year and China may miss this year's growth target of around 5%,» she said. «Deflation pressures could persist longer in such a scenario. The economy would then warrant much stronger or unconventional policies to revive.»
China is the world's second-largest economy, and accounted for nearly 18% of global GDP in 2022, according to World Bank data.
«In our view, Beijing should play the role of lender of last resort to support some major developers and financial institutions in trouble, and should play the role of spender of last resort to boost aggregate demand,» Nomura's Chief China Economist Ting Lu and a team said in a report Tuesday.
«We also see bigger downside risk to our 4.9% y-o-y growth forecast for both Q3 and Q4, and it is increasingly possible that annual GDP growth this year will miss the 5.0% mark,» the report said.
Beijing has acknowledged economic challenges and signaled more policy support. The People's Bank of China unexpectedly cut key rates on Tuesday.
But the moves need time to take effect and haven't been enough to bolster market confidence so far, especially as worrisome
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