(Reuters) – Citigroup (NYSE:) economists raised their forecast for China’s economic growth for the year to 5%, from 4.7%, citing stabilizing economic indicators and Beijing’s supportive policy measures of late.
“The cyclical bottom is here, with all eyes on whether organic demand will pick up amid gathering policy momentum,” Citi economists led by Xiangrong Yu said in a note published on Wednesday.
Citi notes China’s rebounding factory activity and said it expects retail sales to improve and industrial production to hold steady despite a higher base.
The Wall Street brokerage cut its forecast for China’s full-year growth to 4.7% in August on disappointment over Beijing’s policy support until then and especially as worries about contagion from a crisis in the country’s property sector rose.
“Since end-August, policy momentum exceeded expectations clearly, with mortgage repricing and property easing in Tier-1 cities,” they said, also citing a cut in personal income tax.
Beijing is also targeting 5% growth for the year.
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