The Chief Asia-Pacific Economist of S&P Global Ratings says the agency has adjusted its forecast for the China’s GDP growth this year from 4-point-8 percent to 5-point-5 percent. He told CGTN reporter Yang Shanshan the move comes amid a recovery led by consumption and services.
YANG SHANSHAN, Beijing “Why do you decide to adjust China’s GDP growth forecast to 5.5% this year?”
LOUIS KUIJS, Asia Pacific Chief Economist, S&P Global Ratings “So last time we did our forecast was last November of 2022. At that time, we didn’t know what the government would do with the COVID policy and how the reopening would look like. So now, we have more information with that, it looks like from the data we have seen the first part of this year, that this is a pretty decent recovery. You know it’s still early, we felt that on the whole, we want to raise our forecast a bit, reflecting that data from the first part of this year and what we expect to see in terms of consumption and the other part of the economy.”
YANG SHANSHAN, Beijing “What kind of risks do you think Chinese economy is facing?”
LOUIS KUIJS, Asia Pacific Chief Economist, S&P Global Ratings “Yes, a little bit in line with what I just mentioned. I think those global risks are also an issue for China. We were to see a spill-over from the financial stress if the US Fed continue to raise rates more aggressively than what we now expect. We still expect the US Fed to raise its policy interest rates by another 25 basis points this year, and unlike the market, we do not expect a cut by Fed, so we are not as hopeful as you want, that compared to the market that we are going to get an easier news from US FED. That means we will continue to look at what does this mean for our APEC economy in terms of pressure from the Central Bank, this matters for a lot of economies, but also matters for China, where the PBOC is looking at that external picture of US interest rate and what does it mean for currency and policy. I think other challenge for the authorities are what I have just mentioned, how to assure you don’t amid the recovery a bud by too early too quickly, while start to focus on reining in financial risks and credits.” NN: pretty simple binary trade. The more the Chinese economy grow the more oil it consumes…..