In achieving its stated real GDP growth target of “around 5%” for 2024, as announced during the National People’s Congress annual legislative session, China faces significant challenges. Despite this, Fitch Ratings notes that the government is intensifying fiscal easing efforts to mitigate the impact of ongoing strains in the property market.
According to Fitch Ratings’ March Global Economic Outlook, China’s economic growth for 2024 is projected at 4.5%, representing a slight downward adjustment from December.
Projections for China’s housing market have been revised downwards, with an anticipation of a 5%-10% decline in new home sales throughout 2024, reflecting the persistent downturn in new housing demand.
Furthermore, a decrease in infrastructure spending is anticipated in 12 regions burdened with relatively high debt-servicing obligations, exacerbating economic growth risks attributable to enduring challenges in the property sector and broader deflationary pressures. Nonetheless, investments are expected to pick up in economically robust regions, potentially offsetting some of the downside risks to economic growth, particularly when combined with potential increases in special-government bond issuances and central government transfers.
Source: Fitch Ratings
