Top China forecaster sees GDP growth near zero in third quarter

Bloomberg reports that Christophe Barraud, chief economist at Market Securities LLP, said that China’s tough virus curbs mean economic activity in the third quarter could be close to flat compared with the previous three months.

“My view is that the Chinese economy should slow sharply in the third quarter, mainly due to the virus but also controls on property,” Barraud said.

Barraud’s prediction of 0.3% growth in the July-September period from the previous three months is below the median estimate of 1.1% in a Bloomberg survey of economists. He is also bearish on China’s growth for 2021 compared to the market’s median estimate of 8.4%. 

“It should be close to 8% but with risks tilted to the downside,” he said. “If there is another outbreak in the fourth quarter, forecasts should be adjusted below 8%.” The government has set a target of above 6% growth for the year. 

“Risks are tilted to the downside because China will keep implementing a zero-tolerance policy concerning Covid-19, particularly ahead of the Winter Olympics in February,” Barraud said.

China is scheduled to release third-quarter gross domestic product data on Oct. 18. In the second quarter, GDP rose 7.9% from the same period in 2020, and 1.3% from the previous quarter.