This week’s featured insight on GDP Nowcast by DBS economists Samuel Tse and Daisy Sharma reveals that the estimate for real GDP growth is based on available economic data and forecasts for the current quarter. The latest analysis predicts that GDP growth will remain steady at 4.6% in the fourth quarter of 2024.
The focus of the analysis is on China’s real GDP, which showed a slowdown from 4.7% year on year in the second quarter of 2024 to 4.6% in the third quarter. However, there was an acceleration in sequential growth from 0.7% quarter on quarter in the second quarter to 0.9% in the third quarter. Despite net exports being a key driver of GDP growth, the deceleration in external demand in September has impacted the economy negatively.
The Nowcast model predicts that the GDP growth in the current quarter will be led by weaknesses in industrial activity and loans. Retail sales are expected to improve due to a positive wealth effect from the equity market, while fixed assets investment is projected to stabilize. On the external front, exports are expected to moderate slightly, and non-oil imports are forecasted to contract.
Looking ahead to 2024, the economists expect GDP to average 5.0%, down from 5.2% in 2023. This reflects the ongoing challenges in the global economy and the impact of various factors on China’s economic growth prospects. Despite the moderation in growth, there are still bright spots in the economy, such as retail sales improvements and stabilization in fixed assets investment.
Overall, the analysis highlights the importance of monitoring real-time economic data and forecasts to gauge the trajectory of GDP growth accurately. The Nowcast model provides valuable insights into the potential trajectory of China’s GDP growth in the current quarter and beyond. By understanding the key drivers of growth and the potential risks ahead, policymakers and businesses can make informed decisions to navigate the evolving economic landscape.
