(Reuters) -Analysts at J.P.Morgan on Thursday raised their 2023 growth forecast for China’s gross domestic product by 30 basis points to 4.3% as the world’s second largest economy reopens from tight COVID restrictions.
The brokerage also cut its 2022 economic growth outlook for the country to 2.8% from 2.9% previously.
“The most important development in the past month is earlier reopening with a faster pace. Our analysis has taken into account a transitional pain period before the economy enters a strong recovery,” JPM said.
Beijing last Wednesday began dismantling its tough “zero-COVID” controls, dropping testing requirements and easing quarantine rules that had caused mental stress for tens of millions and left its economy battered.
Last month, Goldman Sachs hiked its estimate for China’s economic growth to 4.5% for next year, citing the exit from zero-COVID policy.
China is battling coronavirus outbreaks in numerous major cities, including the capital Beijing, while it takes steps to try to ease the burden of its strict zero-COVID policy.
In the near term, China is likely to face disinflation pressure when domestic demand remains soft before the economy picks up pace, JPM said.
(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Nivedita Bhattacharjee and Dhanya Ann Thoppil)
