Morgan Stanley Revised China’s Growth Forecast

While Morgan Stanley, an American investment bank located in New York City, USA, decided to revise China's growth forecast this year, which reinstated the quarantines with the increase in Covid-19 cases, Citigroup also warned about the risks in the country.

Analysts cut their GDP growth forecast to 4.6 percent from 5.1 percent this year. In the statement, they stated that the zero tolerance policy in the fight against Covid-19 may continue in the coming months. Morgan Stanley noted that the public is reluctant to get a third dose of the vaccine, and therefore the country may adhere to Covid-19 measures all year. According to the baseline scenarios, it was stated that the biggest acceleration in the economy would be in the last quarter. In the worst-case scenario, it was added that China's exit from this policy will be in the first half of 2023, which will be recorded as more distress in the supply chain and a growth of around 4 percent. Citigroup United Banks economists draw attention to the prediction that the gross domestic product growth may take a hit by up to 0.9 points in the second quarter of the year.