April 09, 2025
Our outlook for year-end 2025
Around 4%
Economic growth,
year over year
Higher-than-expected U.S. tariffs are likely to weigh on China’s economic growth. We have lowered our GDP growth forecast from 4.5% to just above 4%. Growth headwinds would be felt through reduced exports to the U.S. and less room for diversion of exports to other countries, a shock to confidence weighing on investment, and weaker global demand.
Around 0.5%
Core inflation, year over year
Supply-centric policy support has reinforced a negative feedback loop between weak demand and low prices. Both the magnitude and composition (that is, greater support to consumers) of policy stimulus are critical to breaking the cycle.
1.2%
Monetary policy rate
The strength of economic recovery depends on the magnitude and allocation of policy stimulus. Well-designed implementation of announced measures will matter to ease developers’ burden while flexibly destocking a housing industry overhang. Meanwhile, we expect monetary easing—we foresee a 30-basis-point cut to the policy seven-day reverse repo rate and 50 basis points of cuts to banks’ reserve requirement ratios—to facilitate fiscal expansion.
Around 5%
Unemployment rate
We believe that structural mismatches in labor supply and demand, particularly among younger workers, may not be easily addressed in the near term and could require additional policy support. We foresee the unemployment rate remaining around current levels the rest of the year.
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