The Chinese economy has struggled since the COVID-19 virus mutated into the more contagious Omicron variant at the end of 2021. Economists at Danske bank expect China to continue struggling.

Low inflation leaves room for policy stimulus

“China faces three strong headwinds from a) zero-Covid policy, b) property crisis and c) fading exports as the US and Europe head for recession.”

“Growth is set to stay below trend in the coming quarters before recovering in the second half of 2023, where we look for an end to the zero-Covid policy. We look for GDP growth at 3.3% in 2022 rising to 4.9% in 2023 and 5.3% in 2024.”

“Inflation remains low in a global perspective, leaving room for continued stimulus. We look for measures to ease the property crisis to be stepped up.”

“The US-China rivalry continues at unabated pace and China faces challenges from new significant US tech export restrictions.”