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UBS, a prominent Swiss multinational investment bank, has recently downgraded its forecast for China's economic growth in 2024, citing concerns over weak domestic demand. The bank now projects China's GDP to expand by 4.6% next year, a significant reduction from its previous prediction of 5.1%. This downward revision reflects growing anxieties about the resilience of the Chinese economy amidst a challenging global landscape.
The revised forecast highlights the mounting pressure on China's economy, which is facing headwinds from both internal and external factors. Domestically, consumer spending remains subdued, as households grapple with persistent inflation and lingering uncertainties about job security. The government's efforts to stimulate the economy through infrastructure spending and tax cuts have yielded mixed results, failing to fully invigorate consumer sentiment. The slowdown in the property sector, a key driver of economic growth, has also added to the headwinds.
Externally, the global economic slowdown, geopolitical tensions, and trade disputes have created a challenging environment for Chinese businesses. The war in Ukraine, coupled with sanctions imposed on Russia, has disrupted global supply chains and amplified inflationary pressures. Additionally, the ongoing trade tensions between the US and China have cast a shadow over investment and trade flows.
The revised forecast underscores the fragility of the Chinese economy and the challenges facing policymakers in stimulating growth. While the government has implemented a series of measures to support the economy, including monetary easing and fiscal stimulus, the effectiveness of these measures remains uncertain. The success of China's economic recovery will hinge on a combination of factors, including the ability to stimulate domestic demand, manage geopolitical risks, and navigate global economic headwinds.
Source: World News Live News Updates: UBS cuts China 2024 GDP growth forecast to 4.6%