SHANGHAI, Apr 24 (SMM) – On top of China's gross domestic product (GDP) growth report released by the National Bureau of Statistics that exceeded expectations, major Wall Street banks have raised their forecast for China's economic growth this year. Following JPMorgan, Citigroup and UBS, Nomura International (Hong Kong) and the Bank of America have recently raised their forecast for China's economic growth this year.

The latest GDP data showed that China's economy staged a strong recovery in the first quarter, with a year-on-year growth rate of 4.5%, exceeding the 4% expected by economists.

Bank of America raised its forecast for China’s GDP growth to 6.3%

Nomura International (Hong Kong) now expects China's GDP to grow by 5.9%, higher than its previous estimate of 5.3%. Bank of America's (BofA) forecast is more optimistic, predicting that China's economy will grow by 6.3% this year, much higher than the previous forecast of 5.5%.

Official economic data showed that China's first-quarter gross domestic product rose 4.5% from a year earlier, thanks to a rebound in the housing market and a surge in consumer spending. In addition, the strong growth of China's exports in March also helped to boost market confidence.

China's economy rebounds after COVID-19 - growth picks up as activity gradually returns to normal

"China is now at its best for pent-up consumer demand post-COVID-19," Lu Ting, Nomura's chief China economist, wrote in a research note. "The breakdown of the GDP data shows that the pace of recovery in the services sector has been stronger than we had previously expected," he said.

Economists from BofA said that the rapid expansion of credit will "promote investment growth more than consumption and boost the cyclical momentum of the Chinese economy.”

JPMorgan and Citigroup have raised their GDP growth forecasts in China

After the release of China's GDP data, JPMorgan Chase, Citigroup and UBS quickly raised their forecasts for China's GDP growth in 2023. Bloomberg Economics expects China's economic growth rate to be 5.8% this year, but said in a new report last Friday that under a more optimistic scenario, China's GDP growth rate could be as high as 6.6%.

JPMorgan raised its forecast for China's economic growth in 2023 to 6.4% from 6%. "The strong first-quarter GDP data suggests that the economic recovery is gaining momentum," Haibin Zhu, JPMorgan's chief China economist, said in a note last Tuesday. A combination of factors contributed to the strong rebound in economic activity in the first quarter, including a notable rebound in travel-related consumption and services. “The stronger-than-expected first-quarter GDP data raised our expectations for full-year GDP growth," he said.

Citi raised its forecast for China's 2023 economic growth to 6.1% from 5.7% previously, saying the Chinese economy is "on track to recovery, driven by consumption and services." Citi added that the stronger-than-expected first-quarter GDP data pointed to further growth ahead.

In addition to JP Morgan Chase and Citigroup, UBS also raised China's 2023 economic growth forecast to 5.7% from the previous 5.4%. UBS said: "Given the first quarter of 2023, the economic recovery is stronger than expected, driven by a strong rebound in consumption and housing."