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China’s better-than-expected first quarter economic growth has spurred some investment banks to raise their growth forecasts for this year.

Economists at Barclays, ING and Citi have raised their China growth outlook for 2019 on Wednesday, though others may be holding off for now.

The Chinese government announced Wednesday that gross domestic product expanded by 6.4 percent year-on-year in the first three months of 2019. That was higher than the 6.3 percent predicted by analysts in a Reuters’ poll.


Upgrade: Citi, Barclays and ING

Economists at Barclays raised their expectation for GDP expansion for this year to 6.5 percent from the previous 6.2 percent, citing the surprise first-quarter growth result.

In a note Wednesday, they said the figure was boosted by “greater impact” from government stimulus measures as well as factors including signs of improving housing and property markets and a better export outlook.

Citi also raised its annual GDP forecast to 6.6 percent from 6.2 percent on Wednesday, citing a more optimistic outlook for a U.S.-China trade deal and stronger domestic demand in China.

Meanwhile, ING lifted its forecast to 6.5 percent from its previous 6.3 percent, calling stimulus-fueled infrastructure projects and 5G telecoms production the “real growth engine” in the first quarter.

Iris Pang, ING’s Greater China economist, said in a note Wednesday, “We think the trend could continue for the rest of the year.”


No change: JP Morgan, Stanchart, DBS

Other analysts saw positives in the first-quarter numbers but were more cautious in their outlook.

J.P. Morgan economists said they expect “solid growth momentum” in the second and third quarters as stimulus continues to bolster the economy. But they added that the impact will eventually weaken by the end of the year. They kept their overall forecast for this year at 6.4 percent.

Standard Chartered also kept its full-year prediction at 6.4 percent, cautioning against “risks of being over-optimistic about China’s growth outlook.”

Taimur Baig, Singapore-based DBS Group Research chief economist, said that the first-quarter showed “some degree of stabilization,” citing data including retail sales, industrial production, manufacturing and non-oil imports. But he also cautioned against over-excitement.

“Nothing is rosy,” he said Thursday on CNBC’s “Squawk Box,” adding that “China is on a structural slowdown path. But stable growth and perhaps a little bit of upside, I think, is real, not just a one-off.”



Reference: CNBC

Reference: https://www.cnbc.com/2019/04/18/citi-barclays-ing-raise-china-economy-forecast-after-2019-q1-gdp-data.html