Citibank has forecast full year GDP growth of 6.8% for China in 2017, with investment and consumption serving as key drivers of the economy in the second half.
At an economic outlook meeting held in Hong Kong on 27 July, Citibank’s chief China economist Liu Ligang said that it expected GDP growth of 6.7% and 6.6%in the third and fourth quarters of 2017, and GDP growth of 6.5% in 2018.
“In the second half of the year the keys drivers of economic growth will still be investment, with expectations that growth in fixed asset investment will rise from 8.6% in the first half to 8.9% in the second half,” said Liu.
“In addition to this consumption will also support economic growth, but the contribution made to GDP growth by net exports will fall from 1.8% in 2016 to 1.4%.”
Liu expects real estate investment to make a contribution of 8 – 9% to full-year GDP growth, despite concerns over the impact of price control measures upon the property market.
According to Liu a bounce back in inventories across first and second-tier cities will have a marked impact upon property prices by as early as the first half of 2018, which will lead to easing real estate investment and a reduction in the sector’s contribution to GDP growth.
Over the long-term, however, Liu does not foresee a crash in China’s property market.