Economic Policies Impacting China: UBS Cuts Growth Forecast
Economic Forecast and US Dollar Impact
The US dollar has been gaining strength in light of UBS's recent decision to cut China's GDP growth forecast. The investment bank now expects China's economy to grow by around 4 percent in 2025, down from a previous estimate of 4.5 percent, citing the looming threat of US tariffs under President-elect Trump.
Concerns from Financial Institutions
UBS's head of Asia economics, Tao Wang, highlighted that uncertainties surrounding the scale and timing of US policies add to this revised outlook. Meanwhile, other major international banks, including Goldman Sachs and HSBC, are maintaining their more optimistic projections of 4 to 5 percent growth, despite ongoing issues in China's property market.
Domestic Challenges and Stimulus Measures
As UBS anticipates continued weakness in the property sector, they project that the yuan could weaken further against the US dollar, potentially trading at 7.6 yuan per dollar by the end of 2025. China's response may include increased stimulus measures to bolster economic growth, as emphasized by ING and other analysts.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.