Despite an upbeat batch of economic data from China last week, including retail sales and industrial production beating estimates, economists are standing by their pessimism.
UBS downgraded its full-year growth forecasts from 3% to 2.7% for 2022 and from 5.4% to 4.6% for 2023.
“While some of the current policy support will bear more fruit in Q4, the Covid situation will likely remain challenging into the winter and early 2023, and export growth is set to slow,” UBS chief China economist Tao Wang said in the note.
Wang adds that the revised 2023 forecast is still based on a scenario where the property market stabilizes soon and Covid restrictions ease from March onward.
But those restrictions have dragged down investor sentiment and that’s unlikely to rebound any time soon, Mattie Bekink, China director for the Economist Intelligence Corporate Network, said on CNBC’s “Squawk Box Asia.”
“We’re not seeing the policy-levers being pulled…