SHANGHAI (Reuters) – Global investment banks have raised their projections for China’s economic growth and eased bearish views on the Chinese currency, spurred by early signs of economic recovery, though concerns over escalating trade disputes with the U.S. persist.
Beijing rolled out fresh stimulus measures this week to boost domestic consumption and pledged support for stock and property markets, while maintaining its 2025 economic growth target at about 5%.
China’s yuan has strengthened around 1% against the U.S. dollar so far this year, reaching 7.23 per dollar on Thursday, after a 2.8% loss in 2024.
Here is a summary of some forecasts for the China’s gross domestic product and currency:
NEW (OLD)
INVESTMENT 2025 2026
HOUSE
CITI 4.7% (4.2%) 4.8% (4.1%)
ANZ 4.8% (4.3%) 4.5% (4.0%)
NOMURA 4.5% (4.0%) 4.0% (4.0%)
NEW OLD
INVESTME Q1 Q2 Q3 END- Q1 Q1 Q2 Q3 END- Q1
NT HOUSE 2025 2025 2025 2025 2026 2025 2025 2025 2025 2026
GOLDMAN 7.3 7.35 7.35 7.3 7.4 7.4
SACHS (3-mon (6-mon (12-mo
th) th) nth)
RBC 7.29 7.45 7.32 7.55
CAPITAL
MARKETS
BOFA 7.5 7.6 7.6 7.6
KEY QUOTES
** Citi
“The path out of deflation is visible, but still relatively narrow at this moment. It hinges on capacity control, property stabilization, and consumption recovery.
“The trade dispute with the U.S. could be a wild card as well, representing risks on both sides. Nevertheless, we are seeing positive early signals accumulating and feel comfortable to call for a shift in supply-demand conditions sooner than later.”
** ANZ
“The authorities appreciate the critical role of asset price reflation to combat the balance sheet recession.
“We estimate that China’s 300 billion yuan ($41.54 billion) (worth of) trade-in program announced at the National People’s Congress will likely add another 1 trillion yuan to retail sales.”
** RBC Capital Markets
“Letting the exchange rate weaken would be the most natural reaction to U.S. protectionism. On the flipside, Beijing is fearful that currency depreciation could trigger domestic financial instability, so there will be no easy resort to a weak FX policy. A broad dollar downturn would ease the upside pressure on USD/CNY.”
** Goldman Sachs
“Given the People’s Bank of China’s (PBOC) reaction function so far, we think Chinese policy makers will primarily rely on other tools to offset the potential adverse growth impact from U.S. tariffs, as opposed to relying heavily on the FX lever, with the risk that the renminbi could even move stronger as an outcome of the mooted Presidential summit later in the year.”
(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)
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